Federal Reserve implements first 25 basis point rate hike in three years

The Federal Reserve announced a 25 basis point increase in the federal funds rate to a range of 3.75%–4.00%, marking the first hike since July 2023. The decision was passed unanimously by the FOMC. According to projections from 18 officials, 16 expect at least one additional 25 basis point hike by the end of 2026, with four anticipating two more. The median forecast suggests maintaining rates through 2027 after one final hike this year, followed by gradual cuts.