# Fed raises rates to fight Iran war inflation surge

> The central bank hikes rates for the first time since 2023 as oil prices soar and gas tops $4.30 a gallon.
- Title: Fed raises rates to fight Iran war inflation surge · ABC News
- Summary: The central bank hikes rates for the first time since 2023 as oil prices soar and gas tops $4.30 a gallon. The Federal Reserve raised interest rates a…
- Keywords: federal reserve, interest rates, inflation, iran war, kevin warsh, oil prices, gas prices, strait of hormuz, saudi arabia, rate hike, monetary policy, news
- Source: ABC News — https://abcnews.com/Business/federal-reserve-expected-raise-interest-rates-time-2023/story?id=136457761
- Author: ABC News
- Read time: 1 min
- Topics: federal reserve, interest rates, inflation, iran war, kevin warsh, oil prices, gas prices, strait of hormuz, saudi arabia, rate hike, monetary policy, news
## Fed hikes rates again
The Federal Reserve raised interest rates a quarter point on Wednesday, the first increase since July 2023. Rates now sit between 3.75% and 4%.
## Iran war drives inflation
The rate hike targets inflation sparked by the Iran conflict. Global oil prices hover near a four-month high and gas averages over $4.30 per gallon.
## Rare dissent at July meeting
The Fed held rates steady in July, but three of 12 board members voted for a hike. That was the most dissenters voting the same way in a decade.
## Warsh prioritizes price control
Fed Chair Kevin Warsh, who took over in May, has pledged to tackle persistent inflation. Prices rose 3.4% in August, well above the Fed's 2% target.

> The Fed's predominant focus right now should be on prices
## Economy shows mixed signals
Despite inflation concerns, employers added 162,000 jobs in August. The economy grew through June, defying fears of a war-triggered downturn.
## Oil supply crunch intensifies
Crude prices hit $105 a barrel, up 50% since the war began in late February. Iran's near-closure of the Strait of Hormuz choked off one-fifth of global supply.
## Saudi shutdown worsens crisis
Saudi Arabia shut down a key pipeline bypassing the strait over the weekend. The move further constrained oil delivery and pushed prices higher.
## Key takeaway

The Federal Reserve raised interest rates a quarter point to combat inflation driven by the Iran war's impact on global oil supplies.