Federal Reserve hikes key interest rate for first time in 3 years, defying Trump demands for a cut

The Federal Reserve raised its benchmark interest rate by a quarter-point to approximately 3.9%, marking the first increase since 2023. This decision aims to combat stubbornly high inflation and reach a 2% goal, despite demands from Donald Trump for cuts. The Fed signaled a potential second hike to 4.1% later this year. Chair Kevin Warsh warned that inflation has remained too high for too long, potentially increasing borrowing costs for mortgages, auto loans, and credit cards.