Defying Trump's Opposition, Federal Reserve Raises Interest Rates to 3.75%–4% Range
For the first time in more than three years, the Federal Reserve has raised interest rates in the United States. Despite strong opposition from President Donald Trump, the unanimous decision lifted the rate to between **3.75%** and **4%**. The Fed signaled it could raise rates further if needed to control inflation.
Kathmandu. For the first time in more than three years, interest rates have been raised in the United States. The move was taken to curb rising inflation, and the Federal Reserve has indicated it could raise rates further if necessary.
In a unanimous decision, the Federal Reserve raised the interest rate to between 3.75% and 4%. Previously, the rate was between 3.5% and 3.75%.
The decision was made despite strong opposition from President Donald Trump. He had demanded a rate cut.
According to Federal Reserve Chairman Kevin Warsh, the move was based on the assessment that ‘inflation is very high and has persisted for a long time.’ He described it as a ‘serious’ and ‘responsible decision.’
However, Trump said, ‘Interest rates should be 1% or lower because we have the best credit in the world, with no competition.’
Rising interest rates make loans, mortgages, and credit cards more expensive. However, they can also provide better returns on savings.
At a press conference held after Wednesday’s decision, Warsh said that although there is an ‘atmosphere of optimism’ in the Federal Reserve leadership, inflation remains a problem.
Like many central banks, the Fed aims to keep inflation at or below 2%. Warsh noted that inflation in the United States has remained above this threshold for more than five years. This situation has made rising commodity prices and affordability a major concern for American voters.
Since the start of the US–Israel war with Iran, fuel prices have also risen due to a sharp increase in wholesale oil prices. This has raised the cost of many goods and services. –Agency