US interest rates have been raised for the first time in more than three years, and could be increased further, in a move aimed at slowing rising prices.
The Federal Reserve lifted its target range to 3.75%-4% from 3.5%-3.75% in a unanimous decision, despite fierce opposition from President Donald Trump, who had called for rates to be cut.
Fed Chair Kevin Warsh said the move was made because "inflation is too high and has been for too long", describing the decision as "sober" and "responsible".
Like many central banks, the Fed targets inflation of 2% or below. Warsh noted that US inflation has been above that target "for more than five years", a run that has helped make affordability one of the top concerns of American voters after a surge in fuel prices driven by soaring wholesale oil costs.
The Fed "cannot affect any individual price - whether it be oil prices, whether it be food stuffs at the grocery store", Warsh said, but the central bank can work to stop price rises broadening across the economy. He added that strength in the jobs market meant the Fed was staying focused on stabilising prices, and that those least well off had the most to gain from lower inflation.
After the announcement, Trump expressed support for Warsh but said the Fed board, which votes on rate decisions, was "hostile". "I'm relying on Kevin, but he's got, you know, a very tough board," he told reporters. Earlier, he had written on social media: "LOWER THE INTEREST RATES FOR THE UNITED STATES OF AMERICA, AND FAST!"
Asked what message the rate rise sent to the president, Warsh chuckled before saying: "I have got nothing for you on a discussion with the president."
Democrats said the increase would push more Americans into debt. "This is going to make everything become more expensive," said Chuck Schumer, the top Democrat in the Senate.
The effects arrived quickly. Major US banks JP Morgan, KeyCorp and BNY all raised their prime lending rate on Wednesday to 7% from 6.75%, which feeds through to credit cards and personal loans. Mortgage costs have climbed over the past year but remain below their 2023 peaks, with a 30-year fixed deal averaging 6.76% and a 15-year deal 6.09%, according to Freddie Mac.
Higher rates make borrowing more expensive for people seeking loans, mortgages and credit cards, but can improve returns for savers. Central banks raise them to discourage spending and encourage saving, in the hope this slows price rises, though the same move can deter business investment and weigh on growth.
Set against the calendar, though, the decision invites a calculation that the Federal Reserve does not publish. This was the first move in any direction since December 2025. The last increase before it came in July 2023. The move itself was a quarter of a percentage point.
The Questionable Times' analysts have divided one by the other. American monetary policy is currently advancing at 0.25 percentage points per nine months, or roughly a third of a percentage point a year. This is not a rate of interest. It is a rate of institution.
The Department of Unnecessary Research notes that inflation has now been above the 2% target for more than five years, and that the correction is under way at roughly a third of a percentage point a year. On this trajectory the target is best understood not as a policy objective but as an heirloom: something the Federal Reserve maintains carefully, discusses with reverence, and hands on.