Fed raises rates for the first time since 2023 as inflation stays stubborn

The Federal Reserve raised its benchmark interest-rate range by a quarter point to 3.75%–4%, its first increase since 2023, and the decision was unanimous. Chair Kevin Warsh said inflation remains too high and has not shown a clear enough, fast enough path back to the Fed’s 2% goal. The shift reflects an economy the Fed still sees as resilient: hiring has kept pace with the workforce and spending remains solid, giving policymakers more room to fight price growth. Higher Fed rates do not instantly change every household bill, but they tend to make borrowing—from credit cards to car loans and eventually mortgages—more expensive, cooling demand over time. Officials’ projections also pointed to another increase this year, signaling that this was not simply a one-off response to a bad inflation reading.