US Federal Reserve Increases Key Interest Rate to Counter Inflation

The U.S. Federal Reserve unanimously raised its benchmark interest rate by 0.25 percentage points, setting the new target between 3.75% and 4%. This first hike since 2023 aims to curb persistent 3.4% annual inflation, which exceeds the Fed's 2% target. The decision is expected to increase borrowing costs for loans and led to declines in U.S. stocks and higher Treasury yields. Policymakers anticipate further rate increases this year.