Fed raises rates for the first time since 2023

The Federal Reserve raised its benchmark rate by a quarter point on Wednesday, to a target range of 3.75%–4.00%, in a unanimous 12–0 vote. It was the first increase since July 2023 and the first under Chair Kevin Warsh, who took office in late May.

Policymakers said inflation remains elevated. Consumer prices rose 3.4% in the year to August, pushed up by energy costs linked to the war with Iran.

Warsh told reporters that inflation is still too high and has lasted too long. He again declined to submit his own rate projection, but the median official expects the funds rate to end the year around 4.1%, implying one more hike.

The decision drew criticism from President Trump, who has pressed for lower rates. The Fed meets next on October 27–28.