Key facts
- The Federal Reserve raised interest rates by 0.25% to a range of 3.75%-4.00%.
- This is the first rate hike by the Fed since July 2023.
- Fed Chair Kevin Warsh stated inflation is too high and the Fed must be confident it is moving to their 2% objective.
- The Fed's decision was unanimous among its policymakers.
- Inflation has risen to 3.4% as of August, partly due to increased energy prices from the war with Iran.
- Silver prices tested resistance at $66 an ounce.
The Federal Reserve implemented its first interest rate increase since July 2023, raising its benchmark rate by 0.25% to a range of 3.75% to 4.00%. The move, which was unanimously supported by Fed policymakers, aims to combat elevated inflation that has been exacerbated by the ongoing war with Iran and subsequent surge in oil prices. Fed Chair Kevin Warsh emphasized that inflation remains too high and that the central bank must be confident in its return to the 2% objective. The decision defied President Donald Trump's repeated calls for lower interest rates. Silver prices saw a rebound, testing resistance at $66 an ounce, as the market reacted to the Fed's policy shift. Inflation stood at 3.4% as of August, with gasoline prices increasing by over 45% since the conflict with Iran began.