The US Federal Reserve has increased its benchmark interest rate by 25 basis points, taking the target range to 3.75 percent to 4 percent.

The September 16 decision marks the Fed’s first rate increase since July 2023. The Federal Open Market Committee approved the move unanimously.

The latest increase reverses the easing cycle that followed earlier rate cuts and comes as the central bank continues to weigh inflation and economic conditions.

The Fed’s new projections also indicate the possibility of another 25-basis-point increase before the end of 2026, although future decisions will depend on incoming economic data.

The decision is being closely watched by global markets because changes in US interest rates can affect borrowing costs, investment flows and currencies in emerging markets.