The Federal Reserve hiked interest rates by 25 basis points amid record diesel prices and global supply disruptions.
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The US Federal Reserve raised interest rates on Wednesday, ending a roughly nine-month holding pattern as policymakers responded to stubborn inflation and rising oil prices. The central bank approved a hike of 25 basis points, bringing the target range to 3.75 to 4 per cent per The National. This marks the first rate increase in more than three years, with officials signaling another hike could follow later this year.
Supply disruptions in the Middle East are driving oil prices higher, rippling through the global economy. Diesel prices hit an all-time high of $6.31 per gallon on Wednesday, prompting alarm from transport companies that rely on the fuel to move goods. These rising costs compound the inflationary pressures that forced the Fed's hand.
Energy companies are adjusting to the shifting landscape. Continental Resources plans to develop a massive oil patch in Venezuela after President Donald Trump called for industry investment in the region. Meanwhile, the Trump administration continues to prioritize beating China in the race for AI dominance, arguing it is an "all-important goal" even as Senator Blumenthal warns of losing control over the technology.
International alliances are shifting in response to US economic policy. European Commission President Ursula von der Leyen proposed making Canada the EU's first "associate member" on Wednesday.