US Fed hikes interest rates for first time in three years

Friday, 18 September 2026 00:20 - - {{hitsCtrl.values.hits}}

The US Federal Reserve has raised interest rates by a quarter of a percentage point to 4% as inflation, driven by soaring fuel prices amid the US-Iran war, continues to weigh on the economy.

It is the first hike in more than three years and comes just weeks before the US midterm elections, despite repeated demands from US President Donald Trump to lower rates.

“Economic activity is expanding at a solid pace. While uncertainty remains elevated owing, in part, to geopolitical developments, domestic spending has been resilient,” the Fed said in a statement on Wednesday. “Inflation remains elevated. Today’s policy action will support a timelier return to the Committee’s 2% goal. The Committee will deliver price stability.”

Nearly three hours after the interest rate decision, Trump posted on Truth Social, his social media platform, that “Interest Rates in the United States should be 1%, or less, because we are the Best Credit in the World — by far. Our country is booming with new Investment!” He added, “Lower the interest rates for the United States of America, and fast!”