US Fed raises interest rates for first time since 2023, Trump sees move as personal attack

On September 17, the US Federal Reserve unexpectedly increased interest rates for the first time since 2023, defying President Donald Trump's call for rate cuts. Federal Reserve Chair Kevin Warsh explained that the decision was driven by inflation being "too high" and persisting "for too long." The Federal Open Market Committee voted unanimously to raise rates by 25 basis points, bringing them between 3.75 and 4.00 percent.

Warsh stated that the move was both serious and necessary. While the increase may not be the last, with most Fed policymakers anticipating at least one more hike before the year's end, the US president was not pleased. Trump accused the Fed's decision of being a "raise against Trump" and called the committee "hostile." The president has been pushing for lower rates to boost economic activity.

The Fed's decision came amid growing calls from some policymakers for a rate hike to combat inflation, which has remained elevated since the Iran war and tariff policies began. The Fed's projections also indicated a continued outlook for inflation and GDP growth. Despite the rate hike, US stock markets were largely expected the news, but they still fell as investors adjusted their portfolios.