Fed raises rates 25bps to 3.75%-4%, first hike since July 2023; Trump demands cuts
The Federal Reserve raised its benchmark interest rate by 25 basis points to 3.75%-4%, its first increase since July 2023, citing persistent inflation and a strong economy. The unanimous 12-0 vote was followed by market turmoil, with gold falling $130 and the Dow dropping 700 points. President Trump immediately criticized the decision, demanding rates of 1% or lower.
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Cross-source coverage
Common ground
- The Fed's rate hike reflects persistent inflation and a loss of credibility due to poor forecasting.
- Fiscal policy—massive U.S. deficits at full employment—is a major driver of inflation that the Fed can't fix alone.
- Higher rates hurt ordinary people globally, especially small businesses, renters, and the working class.
- The dollar's dominance creates real spillover effects for emerging economies, whether intended or not.
- The current system is structurally asymmetric, with the U.S. making decisions that affect the rest of the world.
Points of contention
- Whether the Fed's actions are a sign of U.S. decline or just a normal policy adjustment.
- Whether the Fed has a moral or structural responsibility to consider global impacts of its decisions.
- Whether de-dollarization is a real trend or just rhetoric—data on yuan usage is hotly debated.
- Whether emerging market crises are caused by Fed policy or by domestic mismanagement.
- Whether the Fed's independence is real or a fiction, given political pressure from the White House.
Blind spots
- The debate largely ignored housing affordability as a key wealth destroyer for ordinary Americans.
- The colonial legacy of Bretton Woods and IMF structural adjustment was underplayed by some participants.
- The rise of local currency settlement systems and bilateral swap lines is not captured by traditional SWIFT data.
- The working class in both rich and poor countries is squeezed by a system that protects capital over labor.
- The Fed's forecasting failure is part of a broader global crisis in macroeconomic modeling.
WorldAttention’s read
This debate revealed deep divisions over whether the Fed's rate hike is a technical necessity or a symptom of a broken global system. All sides agree that inflation is persistent, fiscal policy is adding fuel to the fire, and ordinary people—especially in the Global South—bear the brunt of the pain. The main disagreements center on whether the U.S. is in decline, whether the Fed should care about global spillovers, and whether de-dollarization is real or just talk. What got overlooked is how housing, colonial history, and new payment systems are reshaping the landscape. In the end, the Fed raised rates because inflation is still too high, but the real story is who gets hurt and who benefits—and that's a question of power, not just economics.
Reporting timeline
Fed Raises Rates for First Time in Three Years; Trump Demands Immediate Cut
On September 16, the Federal Reserve raised its benchmark interest rate by 25 basis points to a target range of 3.75%–4%, marking its first rate hike in three years. The decision, approved unanimously by the FOMC, was widely expected by markets. The Fed stated that inflation remains elevated and that the move is intended to help achieve its 2% target. Fed Chair Kevin Warsh described the decision as carefully considered and responsible. The Fed's latest economic projections show most officials expect further rate hikes this year, with four forecasting two additional increases. The Fed also slightly raised its 2026 inflation outlook, projecting headline PCE at 3.7% and core PCE at 3.4%. It expects inflation to decline to 2.3% in 2027 and 2.1% in 2028, returning to the 2% target only by 2029. U.S. President Donald Trump strongly criticized the decision, demanding on social media that rates be lowered to 1% or below. This marks Trump's most direct criticism of Warsh, though he expressed continued trust in the Fed chair he nominated. Analysts noted that the Fed rarely raises rates just once, and that the current cycle was anticipated despite an unusual underlying rationale.
Read sourceFed Raises Rates for First Time in Three Years; Trump Demands Immediate Cut
On September 16, the Federal Reserve raised the federal funds rate by 25 basis points to 3.75%–4%, its first hike in three years, following six rate cuts since July 2023 totaling 1.75 percentage points. The FOMC voted unanimously 12-0. Fed Chair Kevin Warsh called the decision 'carefully considered, serious, and responsible,' citing persistently high inflation. The Fed's dot plot indicated 16 of 18 officials expect further hikes, with four forecasting two additional increases. The Fed raised its 2026 inflation outlook to 3.7% headline PCE and 3.4% core PCE, expecting inflation to reach 2% only by 2029. U.S. President Donald Trump criticized the move on social media, demanding rates at 1% or lower and urging an immediate cut. Trump said he still trusts Warsh, whom he nominated in January to replace Jerome Powell. Warsh declined to disclose whether he would meet with Trump to explain the decision. Analysts noted the Fed rarely raises rates just once, and the July meeting had three dissents favoring a hike, while this week's vote was unanimous.
Read sourceFed Raises Rates for First Time in Three Years; Trump Demands Immediate Cuts
On September 16, the Federal Reserve raised the federal funds rate by 25 basis points to a range of 3.75% to 4%, marking its first rate hike in three years. The Federal Open Market Committee (FOMC) unanimously approved the move with a 12-0 vote, citing persistently high inflation. Fed Chair Kevin Warsh described the decision as 'carefully considered, serious, and responsible,' stating that inflation is too high and has been for too long. The Fed's latest economic projections indicate that most officials expect another rate hike later this year, with 16 of 18 participants forecasting an additional increase. The Fed also raised its 2026 inflation outlook slightly, projecting headline PCE at 3.7% and core PCE at 3.4%. U.S. President Donald Trump immediately criticized the decision on social media, demanding that interest rates be lowered to 1% or below and calling for immediate cuts. This marks Trump's most direct criticism of Warsh, though he later expressed continued trust in the Fed chair he appointed. Analysts noted that the Fed rarely raises rates just once, and the decision was widely anticipated by markets.
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Fed Raises Rates for First Time in Three Years; Trump Demands Immediate Cut
On September 16, the Federal Reserve raised its benchmark interest rate by 25 basis points to a range of 3.75% to 4%, marking the first rate hike in three years. The decision, unanimously approved by the FOMC, was driven by persistently high inflation. Fed Chair Kevin Warsh called the move 'a carefully considered decision' and stated that 'inflation is too high, and it has been too high for too long.' The Fed's latest dot plot showed 16 of 18 officials expect further hikes, with four predicting two additional increases. The central bank also raised its 2026 inflation forecast to 3.7% for headline PCE and 3.4% for core PCE, and projected inflation would not return to the 2% target until 2029. U.S. President Donald Trump immediately criticized the decision on social media, demanding rates be lowered to 1% or below and urging the Fed to act 'fast.' Trump, who had previously criticized former Chair Jerome Powell and appointed Warsh in January, said he still trusts Warsh. Analysts noted that the Fed rarely raises rates just once, and the hike cycle was anticipated despite unusual underlying rationale.
Read sourceFed Raises Rates for First Time in Three Years; Trump Demands Immediate Cuts
On September 16, the Federal Reserve raised its benchmark interest rate by 25 basis points to a target range of 3.75%-4%, the first rate hike in three years. The Federal Open Market Committee voted unanimously 12-0 for the increase, which was widely expected by markets. Fed Chair Kevin Warsh described the decision as 'carefully considered, serious, and responsible,' citing persistently high inflation. The Fed's latest economic projections show most officials anticipate further rate increases, with 16 of 18 participants forecasting additional hikes and four expecting two more. The Fed raised its 2026 inflation outlook to 3.7% for headline PCE and 3.4% for core PCE. U.S. President Donald Trump immediately criticized the decision on social media, demanding rates be lowered to 1% or below. Trump, who nominated Warsh earlier this year, said he still trusts the Fed chair but urged faster rate cuts. Analysts noted the unusual nature of a single rate hike, as the Fed typically avoids gradualist measures when inflation is deemed too high.
Read sourceFed raises rates for first time in three years; Trump demands immediate cut
On September 16, the Federal Reserve raised the federal funds rate by 25 basis points to 3.75%–4%, its first hike in three years, following six rate cuts since July 2023 totaling 1.75 percentage points. The Federal Open Market Committee voted unanimously 12-0. The Fed stated inflation remains elevated and the move supports its 2% target. Fed Chair Kevin Warsh called it a carefully considered, serious, and responsible decision. The Fed's dot plot indicated 16 of 18 officials expect further hikes, with four predicting two additional increases. The Fed raised its 2026 inflation outlook slightly, projecting headline PCE at 3.7% and core PCE at 3.4%. It expects inflation to decline to 2.3% in 2027 and 2.1% in 2028, reaching 2% by 2029. U.S. President Donald Trump criticized the decision on social media, demanding rates of 1% or lower and calling for immediate cuts. This is Trump's most direct criticism of Warsh, though he later expressed trust in the chair he appointed. Analysts noted the rare single hike and the unusual rationale, contrasting with July's internal disagreement.
Read sourceFed Raises Rates for First Time in Three Years; Trump Demands Immediate Cut
On September 16, the Federal Reserve raised its benchmark interest rate by 25 basis points to a target range of 3.75%-4%, marking the first rate hike in three years after six consecutive cuts totaling 1.75 percentage points since July 2023. The Federal Open Market Committee voted unanimously 12-0. Fed Chair Kevin Warsh described the decision as 'carefully considered, serious, and responsible,' citing persistently high inflation. The Fed's latest projections show most officials expect further hikes, with 16 of 18 forecasting additional increases and four projecting two more. The Fed raised its 2026 inflation outlook slightly, with headline PCE at 3.7% and core PCE at 3.4%, and expects inflation to return to the 2% target only by 2029. U.S. President Donald Trump immediately criticized the decision on social media, demanding rates be lowered to 1% or below, calling it the most direct criticism of Warsh since his appointment. Trump had previously nominated Warsh to succeed Jerome Powell, whom he had frequently criticized for not cutting rates enough. Warsh, who took office in June, had initially pushed to keep rates unchanged but stated on September 16 that 'the time for action had arrived.' Analysts note the Fed rarely raises rates just once, and the decision was widely anticipated despite unusual underlying rationale.
Read sourceFed Raises Rates for First Time in Three Years; Trump Demands Immediate Cut
On September 16, the Federal Reserve raised its benchmark interest rate by 25 basis points to a target range of 3.75%–4%, the first hike in three years, following six consecutive cuts since July 2023 totaling 1.75 percentage points. The Federal Open Market Committee voted unanimously 12-0, in line with market expectations. Fed Chair Kevin Warsh described the decision as 'carefully considered, serious, and responsible,' citing persistently high inflation. The Fed's updated projections show most officials expect further hikes, with 16 of 18 participants forecasting additional increases and four seeing two more. The Fed raised its 2026 inflation outlook slightly, with headline PCE at 3.7% and core PCE at 3.4%, and expects inflation to return to the 2% target only by 2029. U.S. President Donald Trump immediately criticized the move on social media, demanding rates of 1% or lower and calling for rapid cuts. Trump, who nominated Warsh earlier this year, said he still trusts the Fed chair despite the disagreement. Analysts noted the Fed rarely raises rates just once, and the decision followed internal disagreement at the July meeting where three members dissented in favor of a hike.
Read sourceFed Hikes Rates 25bps to 3.75%-4%, First Increase Since July 2023; Warsh Flags Inflation Concerns
The Federal Reserve unanimously approved a 25-basis-point rate hike, raising the federal funds rate target range to 3.75%-4%, its first increase since July 2023. The FOMC statement noted solid economic expansion, resilient domestic spending, strong productivity, and robust capital investment, while inflation remains elevated. The Fed raised its GDP growth forecasts for this year and next and its inflation forecast for this year, expecting inflation to return to 2% by 2029. The dot plot shows 16 officials expect at least one additional rate hike in 2026, with median projections of 4.1% for both 2026 and 2027. In his press conference, Fed Chair Warsh stated that financial conditions are not restrictive and that policy is not driven by markets. He emphasized that inflation is too high and has persisted too long, and the FOMC is not confident inflation is moving toward target. Warsh attributed rising bond yields to a strong economy, competition for capital, and geopolitics. He declined to comment on discussions with Trump. The White House expressed regret over the rate hike. Market reaction included a $100 drop in spot gold, a 40-point rise in the dollar index above 100, higher Treasury yields, and broad equity declines. Interest rate futures priced in an additional ~33 basis points of hikes for this year.
Read sourceFed Hikes 25bps to 3.75%-4%, First Since July 2023; Warsh Sees No Restrictive Conditions
The Federal Reserve unanimously approved a 25-basis-point rate hike to the 3.75%-4% range, its first increase since July 2023. The FOMC statement noted solid economic expansion, resilient domestic spending, robust capital investment, and a low unemployment rate. Inflation remains elevated, and the inflation forecast for this year was raised, with a return to the 2% target expected by 2029. The dot plot shows 16 officials expect at least one more rate hike in 2026, with median projections for 2026 and 2027 at 4.1%. In his press conference, Fed Chair Warsh stated that financial conditions are not restrictive and that the FOMC is not confident inflation is moving toward target. He attributed rising bond yields to a strong economy, capital competition, and geopolitics. Warsh declined to comment on discussions with Trump and noted a working group will report on AI by year-end. Market reaction included a $100 drop in spot gold, a 40-point rise in the dollar index above 100, higher Treasury yields, and broad equity declines. Interest rate futures now price in an additional ~33 basis points of hikes this year.
Read sourceFed Chair Warsh Jolts Markets: Gold Plunges $130, Dollar Breaks 100, Dow Drops 700 Points
The Federal Reserve raised interest rates by 25 basis points for the first time in three years, a decision Chair Kevin Warsh attributed to three factors: a stronger U.S. economy since July, insufficient improvement in summer inflation data, and a changed geopolitical environment. The vote was unanimous at 12-0. Warsh stated that 'inflation is too high and has been too long,' shifting the Fed's focus to price stability. The updated dot plot showed 16 of 18 officials expect at least one more rate hike in 2026, with the median forecast for the policy rate to reach 4.00%-4.25% by year-end. Markets repriced sharply: the dollar index rose above 100, spot gold fell $130 from its daily high to below $4,240/oz, and the Dow Jones Industrial Average slumped about 700 points. Warsh declined to discuss private conversations with President Trump, emphasizing Fed independence. He also noted that high inflation disproportionately hurts low-income households. The CME FedWatch tool indicated a 54% probability of another 25-basis-point hike by December.
Read sourceFed Raises Rates for First Time Since 2023; Dot Plot Signals More Hawkish Path
The Federal Reserve raised its benchmark interest rate by 25 basis points to 3.75%-4.00%, the first hike since July 2023, according to a summary of the Fed's rate decision and a press conference by Fed Chair Warsh. The dot plot median indicates one additional rate hike in 2026, with the median year-end 2026 rate forecast revised up from 3.8% to 4.1%. Sixteen policymakers now expect at least one more hike this year, up from six in June. Warsh reiterated that U.S. inflation remains elevated and that the FOMC is not confident inflation is moving toward its 2% target, with median PCE inflation forecasts at 3.7% for 2026, 2.3% for 2027, and 2.1% for 2028, reaching 2% by 2029. He stated the economy is strengthening, with robust activity, strong productivity, and solid capital investment. On financial markets, Warsh noted credit flows remain strong and financial conditions are not restrictive, attributing rising bond yields to economic strength, capital competition, and geopolitics. He declined to provide forward guidance or comment on other central banks or discussions with Trump.
Read sourceFed raises rates by 25 basis points for first time since July 2023; more hikes expected
The Federal Reserve raised its benchmark interest rate by 25 basis points to 3.75%-4% on September 17, its first increase since July 2023. The decision was unanimous. The latest dot plot shows 16 of 18 officials expect at least one more hike this year, with 12 anticipating one and four expecting two. Fed Chair Kevin Warsh described the move as 'withdrawing part of the accommodation,' citing full employment and elevated inflation. Analysts offered mixed views: Cheng Shi of ICBC International said further hikes depend on inflation persistence and labor market conditions; Zhao Wei of Shenwan Hongyuan Securities noted strong economic performance may be a prerequisite for more tightening; CICC argued there is no basis for multiple large hikes unless oil prices spiral. Markets reacted with falling equities, rising Treasury yields, a stronger dollar, and lower gold prices. The move comes despite President Trump's calls for lower rates, sparking debate over Fed independence.
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