The Federal Reserve raised U.S. interest rates by a quarter‑point on Wednesday for the first time in three years, defying President Donald Trump’s calls for lower rates

On Wednesday, the Federal Reserve raised the federal funds target range to 3.75%–4.00%, a 0.25‑percentage‑point increase that marks the first hike in three years, following decisions by its Federal Open Market Committee to counter persistently high inflation.^[1]

Officials cited an “elevated” inflation environment that has been fueled in part by the Iran war and ongoing rises in oil prices, circumstances that have kept consumer price indices above the Fed’s 2% goal.^[1][2]

The move represents the Fed’s first rate increase in a three‑year period, a break from its long‑term policy of keeping rates low to support economic growth.^[1][3]

The decision is set to ruffle the President’s carpet, as Donald Trump has repeatedly demanded lower rates to boost the economy, a stance the central bank has rebuffed with its commitment to inflation control.^[1][2][3]

Potential Fallout for the President

Because the Fed’s move is the first to defy President Trump’s repeated calls for a lower rate environment, it could intensify the president’s criticism of the central bank’s policy direction, which he has suggested is detrimental to American growth.^[1][2]