US Fed raises rates to tackle ‘too high’ inflation in move sure to rile Trump
The US Federal Reserve has raised interest rates by 25 basis points to combat persistent inflation, marking the first hike since 2023. The decision, led by Fed Chair Kevin Warsh, directly contradicts President Trump's public demands for lower rates to stimulate the economy.
Why it matters
This move highlights a significant conflict between the executive branch and the central bank, raising concerns about the Fed's independence and the potential impact on the upcoming midterm elections.
WASHINGTON, United States: The US Federal Reserve on Wednesday raised interest rates for the first time since 2023, defying President Donald Trump’s demand for cuts, as central bank chief Kevin Warsh stressed the need to combat inflation that has been “too high” for “too long.”
The Fed’s Federal Open Market Committee voted unanimously to raise rates by 25 basis points to between 3.75 and 4.00 percent, saying the rate hike would support a “timelier return” to its two-percent target for inflation.
Warsh, appointed by Trump, said the decision was a “serious” one, but needed to be taken.
“The plain fact is that inflation is too high, and has been for too long,” he told a press conference.
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