Fed Hikes Interest Rates for First Time in 3 Years—Unanimous Decision Comes in Defiance of Trump

Federal Reserve policymakers have raised the benchmark interest rate for the first time in three years in response to pernicious inflation, defying President Donald Trump's insistent calls for lower borrowing costs.Fed Chairman Kevin Warsh joined the 12-0 majority on the Federal Open Market Committee on Wednesday, voting unanimously to raise the federal funds rate by a quarter percentage point. The move brings the overnight rate to a range of 3.75% to 4.00%, its highest level since last fall."The plain fact is that inflation is too high and has been for too long," Warsh said at a press conference following the vote. "The committee’s unanimous vote shows our resolve to achieve price stability on a timelier basis."The decision marks a stunning reversal in outlook for the central bank, which as recently as March had been expected to cut interest rates this year. But soaring energy prices, fueled by the disruption in oil trade during Trump's war with Iran, have left Fed policymakers faced with a new inflation crisis.Markets now expect the Fed to raise rates again once more before the end of the year. Mortgage rates have already risen sharply in anticipation of the policy change, climbi...