Fed raises interest rates for the first time in over 3 years
The Federal Reserve raised its benchmark interest rate as expected on Wednesday, marking a sharp policy turnaround for an economy increasingly shaped by the war in the Middle East.
Background: what a Federal Reserve rate decision changes
The federal funds rate concerns overnight lending between depository institutions. It is not the interest rate on every household or business loan. Changes can influence other interest rates, credit conditions and exchange rates, and ultimately employment and prices. That chain of effects is why a central-bank announcement matters beyond financial markets.
The Federal Open Market Committee assesses economic and financial conditions when deciding its policy stance. Its meeting statement and minutes serve different purposes: the statement communicates the decision, while the minutes provide a fuller account of the discussion. Reading the dated official documents helps distinguish an announced decision from a prediction about what the committee might do next.
This background explains the policy mechanism, not the outcome of the meeting described above. For that outcome, check the original report against the corresponding official statement. A forecast of a cut is not confirmation that a cut has happened, and a policy change does not establish what any individual lender will charge.
Read in depth: Business
Bank of England raises interest rate to 4%: what it means for borrowers and savers
The quarter-point increase is the first in more than three years. Tracker borrowers face higher payments, while changes for variable mortgages and savings depend on providers.
Poundland owner commits to prioritising jobs in rescue talks
Gordon Brothers met Business Secretary Jonathan Reynolds on 4 November and said it would prioritise bids protecting workers and stores, as suppliers face significant risks.
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