# Fed raises rates despite Trump's fierce opposition

> The Federal Reserve hiked interest rates to fight inflation, defying the president's demands for cuts.
- Title: Fed raises rates despite Trump's fierce opposition · BBC News
- Summary: The Federal Reserve hiked interest rates to fight inflation, defying the president's demands for cuts. The Fed raised rates to 3.75-4% to combat inflation…
- Keywords: federal reserve, interest rates, donald trump, kevin warsh, inflation, us economy, rate hike, mortgages, borrowing costs, us-israel war, iran, oil prices
- Source: BBC News — https://bbc.co.uk/news/articles/cw4gmlyvj422o
- Published: 2026-09-16T21:02:11.316+00:00
- Read time: 1 min
- Topics: federal reserve, interest rates, donald trump, kevin warsh, inflation, us economy, rate hike, mortgages, borrowing costs, us-israel war, iran, oil prices
## Fed raises rates despite Trump
The Federal Reserve raised interest rates to 3.75-4% from 3.5-3.75%, the first hike in over three years. Trump had demanded cuts instead.
## Inflation too high for too long
Fed Chair Kevin Warsh said inflation has been above the 2% target for more than five years. He called the rate hike a "sober" and "responsible decision".

> inflation is too high and has been for too long
## Trump blames hostile board
Trump expressed support for Warsh but said the Fed board was "hostile" and "very political". He told reporters interest rates are too high and not appropriate.

> The board is very hostile, they're very political
## War drives up fuel costs
Fuel prices have surged since the US-Israel war with Iran began, driving up costs across the economy. Affordability is now a top concern for American voters.
## What higher rates mean for you
Higher rates make borrowing more expensive for loans, mortgages, and credit cards. Major banks raised their prime lending rate to 7% from 6.75% on Wednesday.
## Mortgage rates climb higher
A 30-year fixed mortgage now averages 6.76%, while a 15-year deal is 6.09%. Higher rates will mainly affect those seeking new mortgages or refinancing.
## More hikes likely this year
Most Fed policymakers expect another rate increase before year's end, to 4-4.25%. A small majority see further hikes in 2028 before cuts begin.
## Global inflation fight continues
The European Central Bank raised rates last week amid rising inflation from the Iran war. The Bank of England is set to decide on rates Thursday.
## Key takeaway

The Fed raised rates to 3.75-4% to combat inflation that has stayed above 2% for over five years, making borrowing more expensive despite Trump's opposition.