The Federal Reserve raised a key interest rate on Wednesday.

This is the first time since 2023.

The rate went up by a quarter point.

Now it is about 3.9%.

This can make borrowing cost more.

Mortgages, car loans and credit cards may cost more.

The Fed also said it may raise the rate again.

It may go to 4.1%.

Chair Kevin Warsh said inflation is too high.

It has been too high for a long time.

He said the Fed must be sure inflation is going down.

It should go to its 2% goal.

He said new fighting between the U.S. and Iran pushed up gas prices.

This helped convince officials to raise rates.

Preston Caldwell works at Morningstar.

He said Warsh talked tough.

He said Warsh may push for higher rates soon.

President Donald Trump criticized the decision.

He said the Fed acted for political reasons.

He said they raised rates to hurt him.

Warsh said other central banks are raising rates too.

The European Central Bank raised its key rate last week.

The Bank of Japan may do the same on Sept. 18.

The Fed meets again in late October.

Most economists think rates will stay the same then.

That is one week before the midterm elections.

Wall Street analysts think a rate hike by December is almost certain.

Inflation was 3.7% in July.

A year earlier it was different.

It was 2.3% in April 2025.