WASHINGTON, United States: Defying President Donald Trump’s call for rate cuts, the US Federal Reserve hiked interest rates for the first time since 2023 on Wednesday. Central bank president Kevin Warsh emphasised the need to fight inflation that has been “too high” for “too long.”
The Federal Open Market Committee of the Fed unanimously decided to raise interest rates by 25 basis points to a range of 3.75 to 4.00 percent. The committee stated that the rate increase will facilitate a “timelier return” to the Fed’s inflation target of two percent. Trump appointed Warsh, who stated that although the choice was “serious,” it had to be made. At a press conference, he said, “The simple truth is that inflation is too high and has been for too long.”
Furthermore, most Fed members said in their Summary of Economic Projections that at least one more rate hike was probably required before the end of the year, suggesting Wednesday’s rate hike would not be the final one. Following Trump’s war on Iran, his signature tariff policies, and the continued AI boom, prices have skyrocketed, and US people and businesses have been pummelled by years of higher-than-target inflation.
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