US Fed raises rates by 0.25pc to battle inflation
The US Federal Reserve on Wednesday raised interest rates for the first time since 2023, defying US President Donald Trump's demand for cuts, as central bank chief Kevin Warsh stressed the need to combat inflation that has been "too high" for "too long." The Fed's Federal Open Market Committee voted unanimously to raise rates by 25 basis points to between 3.75 and 4.00 percent. Warsh, appointed…
The US Federal Reserve decided to increase interest rates by 0.25 percentage points to a range of 3.75-4.00 percent on Wednesday, despite President Donald Trump's call for lower rates. Federal Open Market Committee chief Kevin Warsh, a former Trump appointee, emphasized that the decision was necessary to address inflation that has been excessively high for too long.
Warsh stated that the decision was serious but required. The Fed projected that inflation would remain above its 2 percent target through the end of the year, with the Personal Consumption Expenditures price index forecasted to reach 3.7 percent. Some Fed policymakers indicated that another rate hike might be needed before the year's end.
Trump reacted negatively, vowing to pressure the Fed for faster rate cuts. The Republican Party is facing challenges in the upcoming midterm elections, with economic issues dominating voter concerns. The Fed raised its own projections for inflation and GDP growth, citing the resilience of the US economy in handling tighter fiscal conditions.
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