The Federal Reserve raised interest rates for the first time in three years.
Explaining the 12-0 decision, the Federal Reserve’s Board of Governors wrote that the Committee “decided to raise the target range for the federal funds rate by 1/4 percentage point to 3-3/4 to 4 percent, in support of the Federal Reserve’s dual mandate.”
“Economic activity is expanding at a solid pace. While uncertainty remains elevated owing, in part, to geopolitical developments, domestic spending has been resilient. Productivity growth is strong, and capital investment is robust. Job gains have kept pace with the workforce, and the unemployment rate has changed little,” the statement read, adding that the action supports a “timelier return to the Committee’s 2 percent goal.”
President Trump blasted the move on Truth Social, declaring that the nation’s interest rates “should be 1%, or less, because we are the Best Credit in the World — BY FAR.”
“Our Country is BOOMING with new Investment! If we stopped Trading with every country that we have a Deficit with, which is most of them, we would make, at least, 1.5 Trillion Dollars a year,” he wrote. “The word ‘Deficit’ is nothing more than a fancy word for LOSS. We are ‘carrying’ almost every country in the World, and that cannot go on any longer. LOWER THE INTEREST RATES FOR THE UNITED STATES OF AMERICA, AND FAST!”
Fed Chairman Kevin Warsh said during a news conference following the rate change that the central bank’s “predominant focus is on the price stability side of our mandate. Plain fact is that inflation is too high, and has been for too long. This summer’s inflation readings do not tell me that underlying trends have meaningfully improved.”
