The US Federal Reserve unanimously voted 12-0 to raise its benchmark overnight interest rate on Wednesday. Chair Kevin Warsh described the 25 basis point move to a range of 3.75% to 4% as a necessary response to steady inflation, ending a policy pause that lasted more than three years. President Donald Trump criticized the decision, which defied his demands for lower rates, although the White House called the hike "unfortunate."

Wall Street banks shifted forecasts following the hawkish meeting, with Goldman Sachs now anticipating another 25 bps hike in October. Standard Chartered revised its outlook to project a December increase, and the median analyst forecast predicts one additional 25 bp hike before year-end. Institutions including Morgan Stanley and NatWest are also adjusting projections as 16 of 18 Fed officials signal further increases in 2026.