Fed raises rates in search of ‘timelier’ drop in inflation
Warsh, speaking in his post-meeting press conference, called the rate hike the "right decision."
The Federal Reserve raised interest rates on Wednesday, with more hikes expected in the coming months, as new US central bank chief Kevin Warsh joined a unanimous decision to control inflation. President Donald Trump had promised lower prices, but global import tariffs, an energy shock following the US-Israeli war with Iran, and AI boom spending kept prices high.
The Fed increased the benchmark overnight rate by 0.25 percentage points to 3.75%-4.00%. Only two policymakers expected rates to remain stable, while 16 anticipated at least one more hike by year-end. Warsh attributed tighter policy to a strengthening economy with strong job growth, domestic spending, and capital investment. The Fed's move was the first in three years and the first under Warsh, who took office only weeks ago.
Inflation remains elevated, and the central bank aims to return to its 2% goal more promptly. Warsh called the rate hike "the right decision" and emphasized a "choice" of the central bank to deliver price stability.
Written by urgent.news from SABC News's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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