US Federal Reserve raises interest rates for the first time since 2023
News Source
β’Wed, 16 Sep 2026 18:28:29 GMT
π° What Happened
The US Federal Reserve has raised interest rates for the first time since 2023. The committee voted 12 to 0 for a quarter point rise. The rate is now 3.75 to 4 percent.
Fed chair Kevin Warsh said inflation is too high and has been for too long. He said this summer's numbers do not show that underlying trends have improved.
The step may put Warsh on a collision course with Donald Trump. Trump has pushed for cuts and picked Warsh expecting them.
π The Backstory
Most Fed officials expect another rise before the end of the year. Four of them expect the rate to reach 4.25 to 4.5 percent. Officials think inflation may not fall to the 2 percent goal until about 2029.
The war with Iran has pushed up energy costs. Petrol costs about $1 a gallon more than a year ago and diesel hit a record $6.31.
After inflation peaked at 9.1 percent in 2022, the Fed raised rates 11 times. It then began cutting in 2024 and 2025.
π― Why It Matters
A rate rise makes borrowing cost more. Mortgages, car payments and student debt are all affected. It also shows how a war and high energy prices reach household budgets far from the fighting.
The US Federal Reserve has raised interest rates for the first time since 2023. The committee voted 12 to 0 for a quarter point rise. The rate is now 3.75 to 4 percent.
Fed chair Kevin Warsh said inflation is too high and has been for too long. He said this summer's numbers do not show that underlying trends have improved.
The step may put Warsh on a collision course with Donald Trump. Trump has pushed for cuts and picked Warsh expecting them.
Most Fed officials expect another rise before the end of the year. Four of them expect the rate to reach 4.25 to 4.5 percent. Officials think inflation may not fall to the 2 percent goal until about 2029.
The war with Iran has pushed up energy costs. Petrol costs about $1 a gallon more than a year ago and diesel hit a record $6.31.
After inflation peaked at 9.1 percent in 2022, the Fed raised rates 11 times. It then began cutting in 2024 and 2025.
A rate rise makes borrowing cost more. Mortgages, car payments and student debt are all affected. It also shows how a war and high energy prices reach household budgets far from the fighting.