US Federal Reserve raises interest rates by 25 basis points amid inflation

The United States Federal Reserve raised its benchmark interest rate by a quarter percentage point to 3.75%-4%, marking its first hike in over three years due to persistent inflation pressures.

Key points

• Officials indicated that another interest rate increase is likely before the end of the year.
• The policy action comes amid rising energy costs driven by conflict involving Iran.
• The Federal Open Market Committee voted unanimously to approve the quarter-point rate increase.

Why it matters

The central bank's shift in monetary policy addresses stubborn inflation fueled by rising energy costs and impacts borrowing costs and economic growth across the nation.