US Fed delivers first rate hike since 2023

On Wednesday, the US Federal Reserve raised interest rates by 25 basis points to combat persistent inflation, marking the first such increase since 2023. The Federal Open Market Committee unanimously decided to raise rates to between 3.75 and 4.00 percent, citing elevated inflation and asserting that the hike would facilitate a "timelier return" to their 2 percent target for the metric.

Federal Reserve Chair Kevin Warsh, during a press conference, emphasized that the decision was not influenced by market conditions, stating it was based on the central bank's assessment of the situation. Warsh highlighted the central bank's independence in staying focused on its objectives, particularly price stability, amid political pressure for lower interest rates.

He noted that while market prices would provide feedback, the decision was made solely by the Federal Reserve to ensure adherence to its mandate. The majority of Fed policymakers anticipate additional rate hikes before the year's end, as outlined in the central bank's Summary of Economic Projections.