The Federal Reserve has resumed its rate-hiking cycle, lifting benchmark rates to 4% to combat stubborn inflation, even as energy costs surge due to escalating US-Iran tensions.
Brent crude reached its highest level in a month amid US-Iran tensions, directly fueling inflation concerns.
The Federal Reserve unanimously raised interest rates by 25 basis points to a 3.75%-4% range, marking the first hike since 2023. Chair Kevin Warsh cited persistent inflation as the primary driver, while rising geopolitical tensions between the US and Iran have pushed Brent crude to one-month highs, further complicating the economic outlook.
The Fed raised rates to combat persistent inflation that has remained above target, with officials noting that underlying economic trends have not shown meaningful improvement.