Federal Reserve hikes interest rates for first time since 2023 amid stubborn inflation

close video WATCH LIVE: Federal Reserve Chair Kevin Warsh speaks after interest rate decision The Fed’s newest chairman outlines the central bank’s policy outlook and the economy following its latest monetary policy meeting. This story about the September 2026 FOMC meeting will be updated with further details. The  Federal Reserve on Wednesday raised its benchmark interest rate for the first time in over three years amid concerns over stubborn inflation that has been driven recently by higher energy prices. Fed policymakers voted 12-0 to raise the federal funds rate from a range of 3.5% to 3.75% to a new target rate of 3.75% to 4%. The 25-basis-point increase marks the first interest rate hike since July 2023 and comes after the Fed left rates unchanged at its first five meetings this year. The Federal Open Market Committee (FOMC), the central bank's panel responsible for monetary policy moves, noted that "Economic activity is expanding at a solid pace. While uncertainty remains elevated owing, in part, to geopolitical developments, domestic spending has been resilient. Productivity growth is strong, and capital investment is robust." "Job gains have kept pace with the workforce, and the unemployment rate has changed little. Inflation remains elevated. Today's policy action will support a timelier return to the Committee's 2% goal," the FOMC added. Federal Reserve Chair Kevin Warsh will discuss the interest rate hike at a press conference. (Eric Lee/Reuters) The FOMC's rate hike announcement was accompanied by a summary of economic projections made by policymakers. The median member of the panel projected one more 25-basis-point rate hike this year on the so-called "dot plot" as the FOMC is set to meet again in October and December where further moves could occur. Fed Chair  Kevin Warsh will hold a press conference at 2:30 p.m. ET.