Fed Signals More Rate Hikes as Inflation Remains Sticky

The Federal Reserve raised its policy rate to 3.75%–4% and left the door open to further hikes as inflation stays above the 2% target and energy prices stay elevated. Kansas City Fed President Jeff Schmid says inflation requires a broader assessment beyond energy, and Fed Chair Warsh echoed the cautious stance. Median projections show most policymakers expect at least one more hike this year (12 see one more, 4 foresee two), with some officials signaling hold next year. Economists warn that both demand-driven overheating and persistent supply shocks could complicate bringing inflation down.