The Federal Reserve raised its main interest rate on Wednesday.

This is the first time since 2023.

The rate went up by a quarter of a point.

Now it is about 3.9%.

This can make borrowing more expensive over time.

Mortgages, car loans and credit cards may cost more.

The Fed also said it may raise the rate again to 4.1%.

Chair Kevin Warsh said inflation is too high.

It has been too high for too long.

He said the Fed must be sure inflation is going down to its 2% goal.

He also said new fighting between the U.S. and Iran has made gas prices go up.

This helped convince officials to raise rates.

Preston Caldwell of Morningstar said Warsh talked tough.

He said Warsh may push for higher rates in coming meetings.

President Donald Trump criticized the decision.

He said the Fed's policymakers were acting for political reasons.

He said they were raising rates to make him do as badly as possible.

Warsh said other central banks are also raising rates.

The European Central Bank raised its main rate last week.

The Bank of Japan is expected to do the same on Sept. 18.

The Fed meets next in late October.

Most economists expect rates to stay the same then.

This is because it is a week before the midterm elections.

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

Inflation was 3.7% in July compared with a year earlier.

It was 2.3% in April 2025.