Federal Reserve raises interest rates as Treasury yields climb higher

The Federal Reserve raised its main interest rate by 0.25% on Wednesday, its first increase in three years. The central bank is trying to bring inflation down. Prices are still rising faster than the Fed wants, with consumer inflation at 3.4% in August.

At the same time, US government bond yields climbed higher. The 10-year Treasury yield hit around 5.0%, a level not seen since 2007. The 30-year yield reached about 5.37%.

Fed officials said they may raise rates one more time later this year. However, markets are roughly split on whether that will happen. Investors see about a 50% chance of another rise at the next meeting in October.