Business

US Fed chair Kevin Warsh explains why the Federal Reserve raised interest rates

By Sohail Khan 17 September 2026, 1:13 am

Benchmarks
Nifty23,217.6099.0

FEATURED FUNDS★★★★★

Motilal Oswal Midcap Fund Direct-Growth

5Y Return
22 %

Invest Now

Enter search text:

Business News›Markets›US Stocks›Wall St Guide›US Fed chair Kevin Warsh explains why the Federal Reserve raised interest rates

Read Today's Paper

US Fed chair Kevin Warsh explains why the Federal Reserve raised interest rates
Synopsis

The Federal Reserve increased interest rates by 0.25 percent. This action was driven by a strengthening US economy and rising inflation. Domestic spending remains resilient and job gains are keeping pace. Inflation has stubbornly stayed above the Federal Reserve's target for years. The central bank's focus remains on achieving price stability.

Listen to this article in summarized format

Loading…
×
×

Unlock AI Briefing and Premium Content

New Year Offer 24 Hours Left
Already a member? Sign In

What's Included

Exclusive Stories
Daily ePaper Access
Smart Market Tools
Curated Investment Ideas
Ad-lite Experience
Subscription

US Fed chair Kevin Warsh explains why the Federal Reserve raised interest rates — Federal Reserve Board Chairman Kevin Warsh speaks during a news conference at the Federal Reserve in Washington.

The strengthening of US economy and geopolitics pushing inflation higher were key reasons for the Federal Reserve to raise interest rates, its chair Kevin Warsh said on Wednesday. Reiterating his commitment not to give forward guidance on the rate path, he pointed to trends in the economic data to deliver the Fed's stated objective of price stability.

The American economy appears to be strengthening. New hirings, private sector earnings and business capital investment have improved in recent months. Credit flows have been robust, he said at a press conference, adding, "I would be hard pressed to describe broad financial conditions as restrictive. So we removed the dose of accommodation, so that financial and credit conditions would be more consistent with our ultimate objectives.”

The Federal Reserve raised the interest rate range by 0.25% to 3.75%-4%. "Economic activity is expanding at a solid pace. While uncertainty remains elevated owing, in part, to geopolitical developments, domestic spending has been resilient. Productivity growth is strong, and capital investment is robust. Job gains have kept pace with the workforce, and the unemployment rate has changed little," the Fed said in a statement.

Also Read: A 25 bps hike: US Federal Reserve raises interest rates for first time since 2023

Warsh however said that despite the geopolitcal landscape, one would appreciate the resilience of the US economy. And while the job market also remains resilient, inflation has stubbornly remained above the Fed 2% target for years.

"So our predominant focus is on the price stability side of our mandate. Plain fact is that inflation is too high, and has been for too long. This summer's inflation readings do not tell me that underlying trends have meaningfully improved," he said.

Follow US market live updates here

On the rise in bond yields, Warsh said that they are not a function of a loss in confidence in the central bank.

Instead, the rise in real-world borrowing costs is due to economic strength, surging capital expenditures that have increased the competition for capital, and geopolitical factors, Warsh said in a press conference following the Fed’s latest meeting.

(Disclaimer: This article is based on inputs from agencies. These do not represent the views of The )

Add as a Reliable and Trusted News Source
Add Now!

(You can now subscribe to our ETMarkets WhatsApp channel)

(What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

…moreless

(You can now subscribe to our ETMarkets WhatsApp channel)

Read More News on
Fed rate hikeFed on inflationKevin WarshWarsh on inflationWarsh rate outlookWarsh on rate hikeWarsh on US economyFed on US economyFed on geopolitcsgeopolitics inflatin

Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

…moreless

Enter search text:

BrowseCompanies:
ABCDEFGHIJKLMNOPQRSTUVWXYZ
123456789

Continue reading with one of these options:
Limited Access
Free
Login to get access to some exclusive stories

& personalised newsletters
Login Now

Unlimited Access
Starting @ Rs120/month
Get access to exclusive stories, expert opinions &

in-depth stock reports
Subscribe Now

Unlock Access to All Exclusives with ETPrime FREE TRIAL

15 Days Free: Unlock All ETPrime Exclusives, Market Tools & ePapers

Trial offer expiring in00 : 05 : 00

I'd rather pay ₹2599 now

Uh-oh! This is an exclusive story available for selected readers only.

Worry not. You’re just a step away.

Prime Account Detected!

It seems like you're already an ETPrime member with

Log out of your current logged-in account and log in again using your ET Prime credentials to enjoy all member benefits.

Unlock ETPrime's Exclusive Stories Today!

Subscribe to gain powerful insights on business, stock market and industry trends.

Big Price Drop! Flat 40% Off

Student Only Offer

Already a Member? Sign In now

Already a Member? Sign In now
Already a Member? Sign In now

Offer Exclusively For You

Save up to Rs. 700/-

ON ET PRIME MEMBERSHIP

Avail Offer

Offer Exclusively For You

Get 1 Year Free

With 1 and 2-Year ET prime membership

Avail Offer

Offer Exclusively For You

Get 1 Year Free

With 1 and 2-Year ET prime membership

Avail Offer

Offer Exclusively For You

Get Flat 40% Off

Then ₹ 1749 for 1 year

Avail Offer

Offer Exclusively For You

ET Prime at ₹ 49 for 1 month

Then ₹ 1749 for 1 year

Avail Offer

Special Offer

Get flat 40% off on ETPrime

Avail Offer
Avail Offer

Claim NowAlready a Member? Sign In now

Need Assistance?

Connect with an ETPrime expert for personalized support and guidance

+91 9484700004

' + h3 + '

' + h4 + '

' + listing + '

What’s Included with

ETPrime Membership

1Exclusive Insights That Matter

Uncover the truth with our investigative stories

Make strategic moves using the real-world case studies

Read industry-specific stories to identify emerging trends

Spot opportunities with in-depth insights that matter

Trump temper on H-1B visas is forcing Indians to do these things to stay put in US

What Adani’s US indictment means for India Inc’s overseas fundraising
Why veterans like Reliance, L&T are on acquisition spree? Aswath Damodaran has an answer.

Will China’s dollar bond sale in Saudi Arabia trump the US in financial world?
Huawei launches its own OS to compete with Google and Apple. But can it win beyond China?

The problem with lab grown diamonds
Why a falling rupee is a better option for the economy

A list of top 20 momentum stocks that have delivered massive returns in one year