US interest rates raised for first time in three years

The Federal Reserve raised US interest rates for the first time in over three years, from 3.5%-3.75% to a range of 3.75%-4% in a unanimous decision. Fed Chair Kevin Warsh explained the increase was due to inflation being too high and persisting for too long. Despite opposition from President Donald Trump, who advocated for lower rates, the Fed stated the move was a sober and responsible decision.

Higher interest rates make borrowing more expensive but offer better returns on savings. Warsh noted inflation has been above the Fed's 2% target for over five years. The Fed's hike could contribute to rising mortgage rates for homebuyers, as banks often adjust their rates based on the Fed's policy rate. Inflation remains a concern, especially ahead of November's midterm elections where affordability is a top issue for voters.

The Fed aims to keep inflation at 2% or below while balancing the potential impact on economic growth.