FED raises interest rates to 3%

FED raises interest rates to 3%

The US Federal Reserve (FED) increased its short-term interest rate 0.25 percentage points to 3%. The move, which was widely expected in financial markets, was the eighth rate rise since June 2004. The rising inflation played a significant role in the FED's decision. Higher interest rates are a defense against rising inflation. FED officials explained that economic risks were balanced between slower growth and rising prices. The officials disclosed that they plan to keep raising interest rates at a measured pace.