Summary

  • The US central bank is expected to raise interest rates for the first time in more than three years today - we'll hear the decision at 14:00 EDT (18:00 GMT)

  • The Federal Reserve is seeking to curb rising prices as the Iran war pushes up global oil prices, which have hit American consumers

  • What are interest rates? Interest rates set the cost of borrowing money, and influence mortgages, loans and savings but can also boost returns on savings. Central banks often hike up rates when they think inflation is too high

  • President Donald Trump has consistently opposed hiking interest rates, arguing lower rates are better for boosting the economy

Live Reporting

Edited by Kathryn Armstrong and Dulcie Lee with business reporter Michael Race in Washington DC

  1. Fed has fought to hold interest rates under new leadership

    US Federal Reserve chairman Kevin Warsh speaks at a podium in front of two US flagsGetty Images

    US Federal Reserve chair Kevin Warsh

    The Federal Reserve had held US interest rates between 3.5% and 3.75% since the new chair Kevin Warsh was sworn in at the central bank in May.

    At Warsh’s first meeting in charge, Fed governors were split on whether to keep rates steady or increase them in a bid to tame inflation, which has gone up during the US-Israel war in Iran.

    US President Donald Trump pushed Warsh's predecessor, Jerome Powell, to cut interest rates. And during the nomination process, Trump made clear he expected Warsh to fulfil his demand for lower rates.

    But, with inflation in the year to August running at 3.4%, (well above the Fed’s target of 2%), and uncertainty surrounding Trump's deal to end the war with Iran, the Fed's rate-setting committee had decided to keep them steady.

  2. US central bank expected to raise interest rates - we'll explain what it means for your money

    Johanna Chisholm
    Live page editor

    The Federal Reserve is seen from outsideReuters

    The Federal Reserve is widely expected to deliver its first interest rate rise in just over three years

    Today we find out if the US Federal Reserve will hike its key interest rate, which would mark the first time it's done so in over three years.

    (For context on just how long ago that was, the last hike was around the same time that Barbenheimer fever was sweeping cinemas across the globe).

    A rise in the federal interest rate is designed to combat inflation - but it could mean higher borrowing costs for everyday Americans.

    Speaking last month, Fed Chairman Kevin Warsh said that “we must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed. Otherwise, we have work to do.”

    When do we find out? At 14:00 EDT (18:00 GMT). Warsh will then provide remarks on the bank’s decision half an hour later. We'll have it all here.