The Federal Reserve voted unanimously to raise short term interest rates by a quarter percentage point to a range of 3.75-4.0%, and penciled in an additional 25bp hike later this year, steps aimed at containing inflation that will test Fed Chairman Warsh’s relationship with President Trump. “Today’s policy action will support a timelier return to the committee’s 2% goal,” officials said in a statement following the move Wednesday, referring to inflation. It was the US central bank’s first rate increase since July 2023.
This goes against President Trump’s wish to reduce interest rates, although the Fed decision was likely in response to the 50% increase in the price of Brent crude since end of February, the result of the US war with Iran, which President Trump initiated. The market reaction was in line with expectations: 10-year TY dropped -5.1bp to 4.95%, and equities held onto earlier gains, with S&P 500 +0.4% and NDQ +0.7%.






