The U.S. Federal Reserve raised interest rates by 25 basis points to 3.9% for the first time since 2023, aiming to curb persistent inflation. The move signals continued pressure on the economy as officials signal potential further hikes in late 2026.
Chairman Kevin Warsh emphasized that inflation remains above target, citing global factors including rising oil prices and geopolitical tensions. The Fed also noted that other central banks are hiking rates in response to global volatility.
The decision comes as the U.S. faces a critical midterm election window, with affordability issues driving political discourse. President Trump has criticized the move, calling for immediate rate cuts, while Fed officials stress the need for sustained rate hikes to meet inflation targets.