Fed Raises Rates to 3.75%-4.00% in First Hike Since 2023

The Federal Reserve increased its benchmark interest rate by 25 basis points to a 3.75%-4.00% range on Wednesday. Decrypt reported that the vote was unanimous, marking the central bank’s first rate hike since 2023.

Chair Kevin Warsh told reporters at the post-meeting press conference that the economy has strengthened and identified inflation as the primary issue. He declined to address President Donald Trump’s reaction to the decision directly.

Markets had priced in the 25-basis-point increase for weeks before the announcement. Bitcoin briefly spiked before stabilizing near $75,500, finishing the session down about half a percent. Warsh indicated that the central bank’s revised outlook expects one additional rate hike before the end of the year.

Warsh also addressed the role of artificial intelligence, stating that Fed independence requires the institution to remain outside of AI policymaking. "The policy decisions on AI are made by other parts of the government. Implications of those decisions have impact on our jobs, and that's what we'll focus on," he said. This approach reflects five task forces created earlier in the year, which includes a group examining how AI impacts productivity and employment.