On Wednesday, the U.S. Federal Reserve raised interest rates for the first time in more than three years as part of a renewed fight against inflation, which has intensified since the beginning of the year because of the war with Iran, UNN reports.
Officials voted to raise the benchmark lending rate by a quarter of a percentage point, to a range of 3.75–4%, thereby reversing one of last year's three rate cuts.
The decision came after several months of a devastating war in the Middle East that has caused energy prices to fluctuate and threatens to make inflation more persistent and widespread. Fed officials are also concerned about the potential inflationary impact of large-scale development of artificial intelligence technologies.
The decision taken on Wednesday marked the first major step toward changing interest rates under new Fed Chair Kevin Warsh. The increase could lead to disagreements with President Donald Trump, who appointed Warsh to the position after repeatedly pressuring the central bank to lower rates.