The US Federal Reserve has raised interest rates for the first time in three years, following a unanimous decision by the Federal Open Market Committee on Wednesday. Federal Reserve Chair Kevin Warsh stated that the action demonstrates seriousness in addressing inflation, which has exceeded the Fed's 2% target for over five years.
The rate hike occurred despite an intense campaign from the White House, with President Donald Trump expressing his view that US interest rates should be 1% or less. Following the decision, Trump criticised the move on social media, reiterating demands for lower interest rates.
Financial markets reacted with relative calm to the news. The S&P 500 index closed 0.4% lower on Wednesday afternoon, while the yield on the 10-year bond rose, surpassing 5%.