The US Federal Reserve raised its benchmark interest rate by 0.25 percentage points — the first increase in three years — amid persistently high inflation and rising Treasury yields, infohub.kz reports.
According to Reuters, this was the first rate hike since 2023.
At the conclusion of its September 16 meeting, the Fed set the target range for the federal funds rate at 3.75–4% per annum. All 12 members of the committee backed the decision.
The Fed said in its statement that the US economy continues to grow at a solid pace. Consumer spending remains steady, while productivity and investment are rising. Inflation, however, remains elevated.
"Inflation remains elevated. Today's monetary policy decision will help bring us closer to the committee's 2% target in a more timely manner," the regulator's statement said.
According to Fed officials' projections, 12 of 18 policymakers expect another 0.25 percentage point rate increase by the end of 2026. Four foresee two hikes, while two expect no further tightening.
The regulator thus signaled a possible further rise in borrowing costs in the coming months.
The rate hike was the first under Fed Chairman Kevin Warsh, whom US President Donald Trump appointed to head the American central bank earlier this year.
The US president has repeatedly urged the Fed to cut rates. On September 13, Trump said the United States should have the lowest interest rates in the world.
Ahead of the decision, the S&P 500 rose 0.3%, while the Nasdaq gained 0.7%. Chipmaker stocks, recovering from a recent decline, supported the market.
The yield on 10-year US Treasury notes fell to 4.95%. On Monday it had topped 5% for the first time since 2023.
Investors are also watching oil prices. A day earlier, Brent fell more than 3%, to about $105 a barrel, after reports of additional oil supplies from Saudi Arabia.
Earlier, Kursiv wrote that shares of Nvidia and other AI companies fell sharply amid concerns over artificial intelligence.