The Federal Reserve raised its key interest rate on Wednesday.

It had kept the rate unchanged about six weeks earlier.

The rate-setting committee agreed on this decision.

Almost all policymakers said a second increase later this year would likely be right.

Fed Chairman Kevin Warsh said the Fed's view of the world situation had changed.

Three things pushed the committee to act instead of waiting.

Fighting in the Middle East has started again and pushed gas prices up.

The economy also shows signs of healthy growth.

At the same time, inflation stays high and will not come down.

Gas reached $4.44 a gallon on Thursday.

That is up 38 cents from a month ago.

Diesel hit a record $6.40.

The move may not raise mortgages or other borrowing much soon.

Markets seem calmer because the Fed is committed to fighting inflation.

The 10-year Treasury yield slipped on Thursday.

Oscar Munoz of TD Securities said the increase shows the Fed takes high inflation seriously.

He said the Fed is ready to act.

For months, officials debated whether higher oil and gas prices from the Iran war were only a short inflation shock.

The war is now in its seventh month, so they no longer count on that.

The Fed's latest statement dropped a mention of supply shocks.

It noted consumer and business spending "has been resilient."

Warsh said the economy appears to be getting stronger.

But inflation has been higher than average incomes for five months.

President Donald Trump criticized the Fed and called for much lower rates.

However, he did not attack Warsh.

Economists say other forces are also lifting longer-term rates.

These include AI data center investment and high government debt.