Federal Reserve raises interest rates for the first time since 2023

TL;DR

The Federal Reserve raised interest rates by 0.25 percentage points to combat rising inflation fueled by global energy prices.
The federal funds rate is now in a target range of 3.75% to 4%, its highest level since December 2025.
The Fed's quarterly projections suggest further rate increases are expected later this year, though policymakers anticipate holding rates steady throughout 2027.
The Consumer Price Index rose 3.4% annually in August, exceeding the Fed's 2% target.
President Trump has publicly called for lower interest rates.
Stocks declined following Fed Chairman Kevin Warsh's comments, interpreted as hawkish and potentially signaling more rate hikes if needed.
Higher borrowing costs are expected on credit cards and other loans, impacting consumers already facing increased prices for essentials.

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