Federal Reserve raises interest rate

The Federal Reserve board voted unanimously on Wednesday to raise its benchmark interest rate to 3.75% - 4% despite President Donald Trump’s repeated calls for officials to lower the interest rate. The quarter-percentage-point raise marked the first interest rate hike since 2023. Economic activity continued expanding, and domestic spending remained strong, despite elevated uncertainty over geopolitical developments, Federal Reserve Board Chairman Kevin Warsh told reporters on Wednesday.

Inflation remained elevated, and the interest rate increase will support a timely return to the Fed’s 2% goal and aid overall price stability, Warsh said. Both productivity growth and capital investment remained strong, and job gains kept pace with the workforce while unemployment showed little change, he added.

Has Trump responded to the interest rate hike? Trump released a statement on Wednesday insisting that Americans' interest rate should be no higher than 1%. The country is booming with new investment, and has the best credit on the globe, he wrote. The Federal Reserve should quickly lower the interest rate for Americans, he added.