CFO Slice

The Federal Reserve has raised interest rates for the first time in three years, unanimously approving a quarter-point increase that lifted the federal-funds rate target range to 3.75%-4%. The move begins to reverse some of the rate cuts delivered last year, and the vast majority of Fed officials projected one additional increase this year as the central bank seeks to return inflation to its 2% target. The shift follows a period in which the Fed has made little progress on inflation since mid-2025, despite cutting rates three times late last year amid concerns about a weakening labor market. The inflation outlook has since been complicated by an energy-price shock stemming from the Iran war, while a surge in AI-related investment has supported economic growth, financial markets, and demand for capital. Following the announcement, President Donald Trump, who has consistently urged the Fed to cut rates, said he told Kevin Warsh, the central bank's chair to "do what you want," adding that Fed officials are "very political. They’re doing the wrong thing [...] They are people put on by politicians.”