Fed meeting updates: Warsh raises rates to 3.75%-4% as inflation persists

US Fed rate hike lifts rates to 3.75%-4% as Wall Street expects another increase in December amid stubborn inflation and rising oil prices.

The US Federal Reserve raised its benchmark interest rate by 0.25 percentage point on Wednesday, September 16. The rate hike was widely expected by Wall Street, as markets had already been preparing for the central bank to raise borrowing costs. After the increase, the Fed’s target range for the federal funds rate moved to 3.75% to 4%.

US Fed rate hike lifts interest rates to 3.75%-4% as Wall Street eyes another increase. (REUTERS/Eric Lee/File Photo) (REUTERS)

This is the first rate hike by the Federal Reserve in three years, marking a major change after a long period without an increase. The Fed’s decision comes as it continues to deal with stubborn inflation in the US economy.

Deep Dive

What is the new federal funds rate range after the recent Fed hike?

Why did the Federal Reserve decide to raise interest rates now?

How does a Fed rate hike typically affect stock markets?

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Despite the rate hike, US stocks remained in positive territory after the Fed announcement. The S&P 500 was up 0.4% on the day, while the Nasdaq Composite gained 0.8%. The Dow Jones Industrial Average was little changed and stayed close to the flat line.

The 10-year US Treasury yield also moved lower after the Fed decision. The yield was last down nearly 5 basis points at 4.947%.