Archive · 18 Sep 2026
US Fed Raises Rates as Inflation Remains High, RBI Watched
The US Federal Reserve raised interest rates to try to slow down rising prices.
The increase was 25 basis points, bringing the target range to 3.75%-4%.
Officials said inflation is still too high and has lasted too long.
US consumer prices rose 0.4% in August, and prices were 3.4% higher than a year earlier.
Higher energy costs, including gasoline and diesel, added to price pressures.
The job market also remained strong, with 1.6 lakh jobs added in August.
President Donald Trump wants lower interest rates because he says high rates hurt the United States.
The Fed’s forecasts leave open the possibility of additional rate increases, while attention is also focused on the RBI.
The US Federal Reserve raised its benchmark interest-rate target by 25 basis points to 3.75%-4%.
All members of the Fed committee supported the decision, citing persistently high inflation.
US consumer prices rose 0.4% in August, keeping annual inflation at 3.4%.
The US added 1.6 lakh jobs in August, while unemployment remained at 4.1%.
President Donald Trump urged the Fed to lower interest rates, despite projections suggesting further hikes could be possible.
- Who
- The US Federal Reserve, its committee members, President Donald Trump, and the RBI are central to the report.
- What
- The Federal Reserve raised its target federal funds rate by 25 basis points to 3.75%-4% as inflation remained high.
- When
- The decision followed August inflation and employment data; the article does not give an exact decision date.
- Where
- The rate decision concerns the United States; the article also says the RBI is in focus but provides no further details.
- Why
- Fed officials said inflation was uncomfortably high and had persisted too long, while the strong labor market gave them room to address it.
Fed’s Inflation Response
Trump’s Rate-Cut Position
Interest-rate direction
Fed’s Inflation Response
The Federal Reserve supported a 25-basis-point increase because inflation remained too high and the labor market was healthy.
Trump’s Rate-Cut Position
President Donald Trump called for lower interest rates, arguing that high rates put the United States at an unfair disadvantage.
Possibility of further hikes
Fed’s Inflation Response
The Fed’s inflation projections and strong employment data leave policymakers with room to consider additional increases.
Trump’s Rate-Cut Position
Trump’s demand for rapid rate cuts conflicts with the prospect of further monetary tightening.
- Rate increase
- 25 basis points
- New federal funds target
- 3.75%-4%
- August consumer-price increase
- 0.4% seasonally adjusted
- Annual US inflation rate
- 3.4%
- August job additions
- 1.6 lakh
- August unemployment rate
- 4.1%
- 2026 inflation projection
- 3.7% based on the personal consumption expenditures price index