US Fed delivers first rate hike since 2023

According to Dawn, the US Federal Reserve raised its benchmark interest rate by 25 basis points on Wednesday, its first increase since 2023. The Federal Open Market Committee voted unanimously to set the target range at 3.75 to 4.00 per cent. Officials cited inflation that remains elevated and said the move would support a timelier return to the 2 per cent target.

Speaking after the decision, Fed Chair Kevin Warsh said the choice reflected the bank's own assessment and was not shaped by financial markets. He said he would watch market prices, but the call was made by the Fed alone. Warsh argued that the central bank's independence depends on staying focused on its objectives, even as political pressure for lower rates builds, and described inflation as too high for too long.

The Summary of Economic Projections, released the same day, shows a majority of policymakers expect at least one more increase before the year ends. Dawn noted the move is likely to displease President Donald Trump, who has demanded lower rates.