Federal Reserve raises interest rates by 0.25%, first increase since 2018

The Federal Reserve raises the federal funds rate by 0.25 percentage points to a range of 0.25% to 0.50%, making the first interest rate increase since 2018. The decision comes as inflation reaches 40-year highs, with consumer prices rising 7.9% year-over-year in February. Federal Reserve Chair Jerome Powell signals that further rate increases will likely follow to combat persistent inflation. The rate hike begins the most aggressive monetary tightening cycle in four decades, with the Fed ultimately raising rates by 5.25 percentage points through 2023.