The US Federal Reserve raised interest rates on Wednesday for the first time since 2023, moving to contain inflation that has stayed well above its long-term target. The Federal Open Market Committee announced the decision after a two-day meeting, lifting the benchmark interest rate by 25 basis points to a range of 3.75%-4.00%.
The move marks a shift for the US central bank, which had kept rates unchanged since January as it waited to assess the impact of higher energy prices, tariffs and broader price pressures on the economy.
Inflation forces Fed action
The Fed's decision comes after consumer inflation stayed at 3.4% in August, unchanged from the previous month but still much higher than the central bank’s 2% target. Inflation pressures have been supported by higher energy prices following renewed tensions in the Middle East, the impact of tariff policies and strong demand linked to the artificial intelligence boom.
