US interest rates raised for first time in three years
The Federal Reserve has raised US interest rates for the first time in three years, moving them to a range of 3.75%-4% to combat persistent inflation. Fed Chair Kevin Warsh described the decision as a necessary step to stabilize prices despite political pressure to cut rates.
Why it matters
Interest rate hikes directly impact borrowing costs for consumers and businesses, serving as a primary tool for managing the national economy and inflation.
Share Save Add as preferred on Google Michael Race Business reporter, Washington DC Watch: Why has the Federal Reserve raised interest rates? US interest rates have been raised for the first time in more than three years and could be increased further in a bid to slow rising prices.
Rates were hiked to 3.75%-4% from 3.5%-3.75% by the Federal Reserve in a unanimous decision, despite fierce opposition from President Donald Trump, who had called for rates to be cut.
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".
After the announcement, Trump expressed support for Warsh but said the Fed board, which votes on rate decisions, was "hostile".
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