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Economy — Federal Reserve

Fed Raises Interest Rates By 25 Basis Points

Federal officials have indicated that another rate increase could come before the end of the year, potentially taking rates as high as 4.5%.

,   and  TIPP Staff
2 min read
Fed raises interest rates by 25 basis points over high inflation. Pic via(@business)

The Federal Reserve raised its benchmark interest rate by 25 basis points on Wednesday, moving the target range to 3.75% to 4.00% in its first rate increase since 2023.

Fed Chair Kevin Warsh pointed to persistent inflation, with consumer prices rising 3.4% year over year in August, significantly above the central bank’s 2% target.

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The increase is expected to raise borrowing costs for consumers, including holders of variable-rate credit cards. Thirty-year fixed mortgage rates have also remained elevated at 6.76%, adding pressure to the housing market.

Federal officials have indicated that another rate increase could come before the end of the year, potentially taking rates as high as 4.5%.

The decision has also intensified tensions between President Donald Trump and the Federal Reserve, with Trump publicly calling for much lower interest rates.

The rate path will depend on inflation, employment and broader economic conditions as policymakers weigh the risks of keeping monetary policy restrictive.

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tippinsightsTIPP Staff

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