US interest rates raised for first time in three years

What the report says

The Federal Reserve unanimously raised US interest rates on Wednesday to 3.75%-4%, according to BBC World News, marking the first increase in more than three years. The move came as policymakers said inflation remained too high and that tighter policy was needed to slow price growth. The decision followed a period in which rates had been cut in December 2025, with the last hike before this one having been in July 2023.

BBC reported that the increase drew strong criticism from President Donald Trump, who has argued for lower borrowing costs. Fed Chair Kevin Warsh described the step as a responsible decision and said the central bank was focused on keeping inflation from spreading further through the economy. The Fed reiterated that it is independent of the White House, while Trump continued to press publicly for lower rates.

The change is expected to make borrowing more expensive for mortgages, credit cards and other loans, although many existing homeowners with fixed-rate mortgages may not see immediate changes. Major US banks also lifted their prime lending rates on Wednesday. More broadly, the rate move reflects ongoing pressure on central banks as they try to balance inflation control against the risk of slowing growth. BBC noted that price pressures have been intensified by higher fuel and energy costs, adding to concern over affordability for households.