WASHINGTON: The US Federal Reserve has delivered a major rate-hike shock, raising its benchmark interest rate by 25 basis points to 3.75–4% amid persistent inflation concerns.
The latest hike marks the first increase since July 2023, signalling renewed concerns over price pressures in the world’s largest economy.
Inflation remains above the Fed’s 2% target, while rising crude oil prices have added further pressure to the economic outlook. The Fed’s decision comes as policymakers seek to contain inflation and prevent renewed price pressures from gaining momentum.
The rate hike could have wider repercussions across global financial markets, with investors closely watching movements in the US dollar, bond yields, equities and emerging-market currencies. .
For countries such as India, changes in US interest rates can also influence global capital flows, currency markets and borrowing costs, making the Fed’s latest move a closely watched development worldwide.
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