US Federal Reserve raises interest rates for the first time since 2023

Submitted ⁨⁨21⁩ ⁨hours⁩ ago⁩ by ⁨MicroWave@lemmy.world⁩ to ⁨economics@lemmy.world⁩

https://www.theguardian.com/business/2026/sep/16/us-federal-reserve-votes-hike-rates

The US Federal Reserve voted to raise interest rates on Wednesday for the first time since 2023 as the central bank continues to fight to tamp down inflation.

The Fed’s open market committee voted unanimously to raise its benchmark interest rate by a quarter-percentage point to a range of 3.75% to 4%. This is the first time the Fed has raised rates since July 2023 and potentially sets Kevin Warsh, the current Fed chair, on a collision course with Donald Trump.

“The plain fact is that inflation is too high and has been for too long,” Warsh said on Wednesday. “This summer’s inflation readings do not tell me that underlying trends have meaningfully improved.”

original

Comments

Sort:hotnew top

SaveTheTuaHawk@lemmy.ca ⁨20⁩ ⁨hours⁩ ago
This is Trump’s guy, which means the US debt load is fucked.

original
BarneyPiccolo@lemmy.today ⁨20⁩ ⁨hours⁩ ago
I love the delicious irony: Trump has been screaming for the Fed to LOWER interest rates, and instead they are being increased, as a direct result of Trump’s actions. He’s getting the opposite of what he wants, only because of his own fuck ups.

original
Bustedknuckles@lemmy.world ⁨19⁩ ⁨hours⁩ ago
I actually feel bad for the fed. They have 2 jobs and 1 left lever. Inflation is not high because most Americans are overemployed and making too much money - which is what the higher rates are supposed to address. Inflation is high because our administration and Congress are absolute fucks.

But the Fed can’t end wars or tax wealth…so they raise the rate which will result in less employment but isn’t all that likely to affect inflation due to the asymmetric distribution of consumer spending. Stagflation seems inevitable without Congress doing it’s in job

original
CubitOom@infosec.pub ⁨19⁩ ⁨hours⁩ ago
I almost never hear economists explain why rasing rates is supposed to lower inflation. Or why it’s the only tool used to try to combat inflation.

The reasoning behind how increasing interest rates reduces inflation, is that it makes it harder for companies to get loans and keep people employed.

Literally, the fed increasing rates means they want to make more people unemployed, because they think inflation is caused by workers spending too much of their expendable income.

This is flawed logic in a K shaped economy, or an economy that is under pressure due to a lack of goods because of war and tariffs.

Rasing the interest rates, will not help reduce inflation rates or help the fed meet their 2% goal. This will only hurt workers, and increase federal debt.

There needs to be a plan to address the actual issues that are causing inflation.

Every rate increase is a hope that people lose jobs. And it simply isn’t going to resolve our issues.

original
- pmtriste@lemmy.world ⁨17⁩ ⁨hours⁩ ago
  That’s because the actual way to lower inflation, raising taxes (especially on the ones who have most of the money), is deeply unpopular with the people who control the government (the ones who have most of the money). Also, everyone likes to pretend the government has a “budget” that equals the taxes it brings in, rather than taxes and spending being the mechanism by which we can control inflation and the tool to improve the economy. That isn’t the narrative they’ve been writing all these years.
  
  original
  - hubertmanne@piefed.social@piefed.social ⁨9⁩ ⁨hours⁩ ago
    its funny how republicans always talk about raising taxes depress the economy yet when we have high interest rates they fight raising taxes on the rich.
    
    original
  - iopq@lemmy.world ⁨15⁩ ⁨hours⁩ ago
    Raising taxes on the poor would combat inflation better because the poor spend all of their money
    
    original
    -> View More Comments
- Earthwormjim91@lemmy.world ⁨16⁩ ⁨hours⁩ ago
  
  Literally, the fed increasing rates means they want to make more people unemployed, because they think inflation is caused by workers spending too much of their expendable income.
  
  That’s not what they think, it’s just the only tool the Fed has left at this point to try to lessen the overall impact of inflation. They can’t raise taxes. They can’t end Trump’s stupid fucking wars. Those are all functions of Congress doing their fucking jobs.
  
  original