US interest rates raised for first time in three years
Fed Chair Kevin Warsh said the move was because "inflation is too high and has been for too long", adding that it was a "sober" and "responsible decision".
On September 17, the US Federal Reserve raised interest rates for the first time in over three years, in an attempt to curb inflation. The Fed increased the rates from 3.5%-3.75% to 3.75%-4%, with the decision made unanimously despite criticism from President Donald Trump. Fed Chair Kevin Warsh stated the move was necessary due to "inflation being too high and having been so for too long."
Higher interest rates make borrowing more expensive, but can also result in better returns on savings. Warsh noted that inflation had remained above the Fed's 2% target "for more than five years". While the Fed cannot directly impact individual prices, it aims to prevent price increases from spreading throughout the economy. The rate hike could affect mortgage rates and other forms of borrowing, with major banks like JP Morgan and KeyCorp increasing their prime lending rate to 7% from 6.75%.
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