A 25 bps hike: US Federal Reserve raises interest rates for first time since 2023

The US Federal Reserve raised interest rates by 25 basis points for the first time since 2023, driven by inflation staying at 3.4% in August well above the 2% target. The hike marks new Fed Chair Kevin Warsh's first major credibility test and puts him at odds with President Trump, who had pushed for rate cuts. For India, analysts note the move could strengthen the Fed's inflation-fighting stance but may trigger FII outflows, rupee pressure and tighter financial conditions.