Fed raises rates to 3.75%-4% and signals another hike

The Federal Reserve raised its benchmark interest rate by 25 basis points on Wednesday, lifting the target range to 3.75%4%. It was the central bank's first increase since 2023, and the decision was approved unanimously by the Federal Open Market Committee. Officials said inflation remains elevated and that the move is intended to help bring price growth back toward the Fed's 2% goal. Updated projections also show many policymakers think another rate increase could happen later this year. The decision came after weeks of market expectations that the Fed would tighten policy again. The central bank also raised its inflation forecasts for this year and lowered its unemployment outlook slightly, suggesting it sees price pressures persisting even as the labor market remains relatively stable.