US Federal Reserve hikes interest rate to 3.75-4% range; first time since 2023
The US Federal Reserve's hike decision comes on the back of persistent inflation and a broader increase in global borrowing costs. Inflation has remained stubbornly elevated, while borrowing costs around the world have moved higher.
On Wednesday, the Federal Open Market Committee (FOMC) led by US Federal Reserve Chair Kevin Warsh increased the key interest rate to a target range of 3.75%-4%. This marks the first interest rate hike since 2023. In a statement, the FOMC explained that the rate increase was done to support the Federal Reserve's dual mandate of maximum employment and stable prices.
While economic activity is expanding, domestic spending remains resilient, productivity growth is strong, and job gains have kept pace with the workforce. The unemployment rate has remained steady at 4.1%. Despite inflation staying elevated, the Federal Reserve is optimistic about a return to its 2% inflation goal and will continue to deliver price stability.
The Fed expects to raise interest rates once more this year, with the possibility of rates moving lower again in 2028.
Written by urgent.news from Times of India's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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