Fed Raises Interest Rates for the First Time Since 2023 — Unanimous Vote, Against Trump’s Wishes

The United States Federal Reserve raised interest rates on Wednesday for the first time in more than three years, in a renewed battle against stubborn inflation — just days after President Donald Trump declared that the U.S. should have “the lowest interest rates in the world”.

The decision was taken by a unanimous 12-0 vote of the voting members of the Federal Open Market Committee (FOMC), which raised the benchmark federal funds rate by a quarter percentage point, to a range of 3.75%–4%. It is the first increase since July 2023 and the first rate change since December 2025. “Inflation remains elevated. Today’s policy action will support a more timely return to the Committee’s 2% objective,” the Fed’s official statement said. “The Committee will bring price stability.”

It is the first major rate decision under Kevin Warsh, who took office at the end of May after being appointed by Trump with the expectation that he would cut rates — but who has now sided with the markets, not the president. At the press conference after the meeting, Warsh said: “The simple truth is that inflation is far too high and has been for a long time.”

The officials’ new economic projections (“dot plot”) show that 16 of 18 policymakers expect at least one more quarter-point increase by the end of this year, which would take the rate to 4.00%–4.25%. Markets reacted calmly to the announcement: the S&P 500 index rose 0.3%, the Nasdaq 0.7%, while the 10-year bond yield fell to 4.957%.

Inflation has stayed above the Fed’s 2% target for more than five years; according to the central bank, the main culprits are the war with Iran, which has pushed up energy prices, and the massive expansion of artificial intelligence. National Economic Council Director Kevin Hassett told CNN that President Trump would accept the Fed’s decision.

Analysts described the hike as “well telegraphed” — but not without risk: a monetary tightening cycle, just weeks before the midterm elections, could raise borrowing and credit-card costs for American consumers.

Source: Reuters — https://www.reuters.com/business/view-markets-steady-after-fed-raises-rates-points-another-hike-this-year-2026-09-16/