Fed raises rates for first time in 3 years, voting against Trump’s wishes

WASHINGTON — Federal Reserve policymakers responded to stubborn inflation by opting to raise their benchmark for short-term interest rates for the first time in three years on Sept. 16, just days after President Donald Trump said the United States should have “the lowest interest rates in the world.”

The vote was unanimous among the Federal Open Market Committee’s 12 voting members.

The federal funds rate now stands at a range of 3.75% to 4% — a quarter percentage point higher than before. The Fed typically raises rates to tame inflation by making borrowing more expensive, which can lead to less demand and eventually lower prices. Raising the target range also means consumers will likely see higher interest rates on things like credit cards and personal loans.

Although a hike was not guaranteed, many forecasters were expecting one with inflation still above the Fed’s 2% target, oil prices above $100 per barrel, and Fed Chair Kevin Warsh’s past commitment to deliver price stability. Still, the Fed cannot control every factor behind the United States’ stubborn inflation. It has limited influence over tariffs, the Iran war, and the AI buildout that are helping drive prices higher.

"Inflation remains elevated. Today's policy action…

Original source: https://www.usatoday.com/travel/