Federal Reserve raises interest rates by 0.25 percentage points, first hike in three years
Quick Look
- The Federal Reserve raised interest rates by 0.25 percentage points to a range of 3.75%-4.00%, its first increase in three years, citing elevated inflation and aiming for a timelier return to its 2% target.
- The move is expected to anger US President Donald Trump.
AI-generated summary
Why It Matters
The Federal Reserve had held interest rates near zero for several years before beginning a series of hikes in 2022 to combat inflation. This marks the first rate increase since 2023.
The Federal Reserve raised interest rates by a quarter of a percentage point on Wednesday, its first hike in three years as the central bank battles high inflation with a move sure to anger US President Donald Trump.
The Fed’s Federal Open Market Committee voted unanimously to raise rates to between 3.75 per cent and 4.00 per cent, citing “elevated” inflation. It added that the rate hike would support a “timelier return” to its 2 per cent target for the metric.
More to follow …
What to Watch
AI outlook — possibilities, not facts
The Federal Reserve will continue to raise interest rates in subsequent meetings to further combat inflation.
Likely · Within months
Open Questions
- How will President Trump respond to the rate hike?
- What are the projected future rate increases?
- How will the housing and automotive sectors be affected?
