Federal Reserve raises interest rates by quarter point

The Federal Reserve raised its main interest rate by 0.25 percentage points on Wednesday. The rate now sits between 3.75% and 4.00%. This is the first increase since 2023. All Fed policymakers agreed on the decision, which was led by new Fed Chair Kevin Warsh. The Fed said that inflation has risen again and that the economy remains strong. Geopolitical uncertainty also played a role in the decision. The rate rise happened despite opposition from the president. Fed officials expect at least one more rise before the year ends. Futures markets give an 87% chance of another hike this year. Traders also expect rates to go above 4.25% by December 2027, as borrowing costs rise for consumers and businesses.