▲ This photo, released by Reuters, shows U.S. Federal Reserve Chairman Kevin Warsh holding a press conference at the U.S. Federal Reserve in Washington on June 17, 2026. (Yonhap)

By Song Sang-ho

WASHINGTON, Sept. 16 (Yonhap) -- The U.S. Federal Reserve raised its benchmark interest rate by a quarter percentage point on Wednesday, marking the central bank's first hike since July 2023, amid persistent inflation and high oil prices.

During the two-day Federal Open Market Committee (FOMC) meeting, the Fed decided to increase the rate to the 3.75–4.00 percent range although U.S. President Donald Trump has threatened to stop trading with countries running trade surpluses with the United States unless the central bank lowers rates.

The increase left the gap between the key interest rates of South Korea and the U.S. at up to 1 percentage point.

In the run-up to the FOMC meeting, new data added to concerns over price pressures. On Friday, the Labor Department's Bureau of Labor Statistics reported that the "core" consumer price index, which excludes volatile food and energy costs, recorded a 0.3 percent monthly gain last month, 0.1 percentage point higher than forecast.

This week's hike marked a setback for Trump as the president has continued to pressure the central bank to bring down borrowing costs to boost the economy, particularly ahead of the November midterm elections, where control of Congress is at stake.

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