The US Federal Reserve is widely expected to announce an increase in interest rates today, marking the first such move since 2023. This decision comes amidst persistently high inflation, which has remained above the central bank's 2% target for more than five years.
It is anticipated that the Fed will raise interest rates by a quarter of a percentage point, or 25 basis points. This would set the benchmark federal funds rate within a new target range of 3.75% to 4%.
The central bank's last rate increase effectively concluded its response to the Covid pandemic. However, inflation has been further exacerbated by the ongoing conflict between Donald Trump's administration and Iran. President Trump has reportedly pressured the Fed chair, Kevin Warsh, to cut rates, stating that the US should have "the lowest interest rate in the world" regardless of economic data.
The Fed's decision is due to be released at 2pm ET, with Chair Warsh scheduled to hold a press conference at 2.30pm ET.