Federal Reserve hikes key rate for 1st time in 3 years, defying Trump demands for a cut

WASHINGTON (AP) — President Donald Trump is blasting Federal Reserve governors after the board raised its benchmark interest rate Wednesday for the first time since 2023 in an effort to quell stubbornly high inflation. The central bank also signaled another rate hike could occur later this year. Trump called the governors politicians and said they’re trying to hurt him politically. The quarter-point increase lifts the Fed’s key rate to about 3.9% and, over time, could result in higher borrowing costs for mortgages, auto loans and credit cards. The move comes as Americans are already struggling with high costs for groceries, gas and housing. Affordability has taken on a leading role in the upcoming midterm elections, just seven weeks away.