Overview
- The Federal Reserve on Wednesday raised its target federal funds range by 25 basis points to 3.75–4.00 percent, the first increase since July 2023.
- The Fed’s Summary of Economic Projections shows many officials expect further tightening, with a majority signaling at least one more 25‑bp move and several open to two additional hikes.
- Markets moved quickly after the decision: ten‑year Treasury yields initially fell to about 4.95 percent and major U.S. stock indexes dropped as investors reassessed valuations and bond returns.
- President Donald Trump publicly criticized the move on Truth Social, repeating his call for lower rates, while economists said the hike bolsters the Fed’s credibility and signals independence from political pressure.
- Higher U.S. rates will raise borrowing costs, pressuring growth‑sensitive stocks and long‑duration bond funds, while a stronger dollar and higher yields could affect international ETF savers and global asset prices.