Fed hiked rates for first time since 2023 amid persistent inflation pressure

The Federal Reserve $FED raised interest rates after holding steady for over a year, with Governor Musalem signaling more hikes likely needed to curb inflation. The move marks an abrupt shift in monetary policy, with Treasury yields $UST climbing to multi-year highs as the market reprices rate expectations.

Fed Chair Warsh's administration has adopted a hawkish stance despite earlier political pressure from the Trump administration, citing inflation remaining "too elevated" for comfort on current policy settings.