Federal Reserve raises interest rates for first time since 2023

The Federal Reserve raised interest rates by 0.25% for the first time in three years in a unanimous 12-0 vote.

The rate will increase from a range of 3.5% to 3.75% to a new target range of 3.75% to 4%, according to the agency.

“Economic activity is expanding at a solid pace. While uncertainty remains elevated owing, in part, to geopolitical developments, domestic spending has been resilient,” the Federal Reserve said in a statement. “Productivity growth is strong, and capital investment is robust. Job gains have kept pace with the workforce, and the unemployment rate has changed little.”

The agency added that while inflation remains high, today’s decision by the Federal Reserve board “will support a timelier return to the Committee’s 2% goal.”

What did Federal Reserve Chair Kevin Warsh have to say about the rate hikes?

Federal Reserve Chair Kevin Warsh said the higher interest rates will stabilize prices and support full employment.

“Our decision comes at a time when the American economy appears to be strengthening,” Warsh said. “I would be hard pressed to describe broad financial conditions as restrictive.”

Warsh added that the unemployment rate remains low and inflation has remained high for more than five years.

More Consumer-Focused News You Can Use

Read the original article on NJ.com. Add NJ.com as a Preferred Source by clicking here.