Fed Raises Rates for First Time in Three Years, Defying Trump

The Federal Reserve unanimously raised its benchmark interest rate by 0.25 percentage points on Wednesday, marking the first increase in over three years as policymakers moved to combat persistent inflation driven by high energy costs. The decision lifts the target federal funds rate to a range of 3.75% to 4.00%. Fed Chair Kevin Warsh stated that "the plain fact is that inflation is too high and has been for too long," citing elevated consumer prices and geopolitical uncertainty. The central bank's quarterly projections now signal at least one more rate hike is expected before the end of the year. The move defied public pressure from President Donald Trump, who has repeatedly demanded lower rates. Following the announcement, Trump posted on Truth Social that "Interest Rates in the United States should be 1, or less, because we are the Best Credit in the World BY FAR." He argued that lower rates would spur investment and claimed the U.S. could save $1.5 trillion annually by ceasing trade with countries where it runs a deficit. The rate hike comes as U.S. consumer prices rose 3.