U.S. Federal Reserve hikes key interest rate for first time in three years, defying political pressure.

The Federal Reserve has raised its benchmark interest rate by a quarter-point, setting the target range for the federal funds rate to 3.75% to 4.00%. This marks the first rate hike since 2023 and was a unanimous decision by the Federal Open Market Committee (FOMC). The move aims to combat persistently elevated inflation, which has remained above the Fed's 2% target for over five years. This action is expected to increase borrowing costs for consumers on credit cards, auto loans, and mortgages, and could also impact business hiring.