Federal Reserve Raises Interest Rates for First Time Since 2023 Amid Persistent Inflation and Iran War

The Federal Reserve unanimously voted to increase the federal funds rate by 0.25 percentage points, setting the new target range between 3.75% and 4.00%. This marks the first rate hike since July 2023 and is a response to stubbornly high inflation, which remains above the Fed's 2% target, exacerbated by rising global energy prices due to the Iran war. Policymakers also indicated the possibility of another rate increase before the end of the year.