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September 22, 2026

Federal Reserve rate hike reflects new world of sticky inflation and faster growth

  • The low interest-rate, low-inflation world that lasted for nearly 15 years after the Great Recession is over.
    • By CHRISTOPHER RUGABER
    AP Economics Writer

    WASHINGTON — President Donald Trump has renewed his attacks on the Federal Reserve after it hiked its benchmark interest rate last week, but the Fed matters less than broader economic trends when it comes to longer-term borrowing costs, economists say.

    The economy is growing steadily despite being hit with repeated shocks — and may even be accelerating — while inflation remains stubbornly high. And big tech firms are borrowing huge amounts of cash to plow into data center construction while the federal government is still running large yearly budget deficits. All these trends point to higher interest rates regardless of what the Fed does, analysts say.


     
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