Warsh is asked what has changed since the last rate decision in July, when the committee chose to hold the interest rate steady.

He lays out three points the informed the decision this time:

1. A stronger economy. Data and labor markets show that the economy has strengthened, Warsh says
2. Inflation trends. Summer inflation trends were "not passing the test", he says.
3. Geopolitics. "There's no hiding from hotspots around the world," he says.

Warsh was asked what his message was to Donald Trump, who has repeatedly called for interest rates to be cut, not raised.

"I've got nothing for you on a discussion with the president," he replies.

He reiterates that the least well-off have the most to gain from stable prices, and that today's rate rise will "ensure stable prices".

Trump has pushed for lower interest rates since beginning his second term, which led to a major, public dispute with Warsh's predecessor.

Warsh says the rate hike today was based on the Fed's assessment of the strength of the economy and was not led to it based on the market forces.

Most of those in financial markets had treated an increase as a nailed-on certainty, which was reflected in stock prices and bond yields this week.

The decision to raise interest rates has been a possibility for months, since the beginning of his term, Warsh says.

"The decision we made today was a sober decision, serious decision, responsible decision, one that we have been preparing for and thinking about in my 120 days here," he says.

He adds that he's not going to prejudge decisions about future rate hikes.

After his statement, Warsh answers questions from the media.

The first question asks how he thinks rate rises can address the supply-side inflationary pressures, namely the rising price of oil due to disruption in the Strait of Hormuz.

Warsh says: "We cannot affect any individual price, whether it be oil prices, whether it be foodstuffs at the grocery store."

"But what we can do and will do is ensure that any change in relative prices don't broaden out," he adds

Image source, Reuters

The Fed has role in stabilising prices, Warsh says referring to one of the central bank's dual mandates.

"Those who are least well off have the most to gain from a durable expansion, a solid labour market, and stable prices," he adds.

And with that he opens the floor for questions.

Warsh now turns his attention to other advanced economies, saying most are also facing pressures.

"Our decision reflects our best judgement," he says.

Last week, the European Central Bank raised its main interest to 2.5%.

Warsh says "we must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed".

Today, he adds, the FOMC decided that "this standard has not been satisfied".

• What is inflation again? It's the increase in the price of something over time. For example, if a bottle of milk costs $1 but is $1.05 a year later, then annual milk inflation is 5%

Warsh says there is "an attitude of optimism" within the Federal Reserve leadership however there inflation remains a persistent issue.

"For more than five years, inflation has been running above target," he says. "The 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 improved."

After announcing the news we saw a few minutes ago - that the federal interest rate has been raised - Warsh then reads the statement the Fed released.

As a reminder, that statement said:

• Economic activity is expanding at a solid pace
• Uncertainty remains elevated, owing in part to geopolitical developments
• Domestic spending has been resilient
• Job gains have kept pace with the workforce
• Inflation is still elevated, and the Fed hopes today's action should support a "timelier return" to its 2% inflation goal

Image source, Reuters

Fed Chairman Kevin Warsh is speaking now - he'll be taking questions too.

We'll bring you the latest here, but you can also follow along by pressing watch live above.

For the first time in three years, the US federal interest rate has risen.

In just a few minutes, Federal Reserve Chairman Kevin Warsh will speak to the press about the decision, which was unanimous among the Fed's Open Market Committee (FOMC).

Reporters will undoubtedly have a lot of questions for Warsh, especially considering repeated pushes by President Trump to keep the rate down.

We will bring you the key lines here, and you can also watch live by clicking the play button above.

Michael Race
Business and economics reporter

Price rises are set to ease in the coming years, according to projections from the US central bank.

Inflation, which is a measure used to assess the cost of living, will likely be 3.7% for 2026, meaning prices were 3.7% higher on average, than the year before.

The rate is expected to fall to 2.3% next year, and 2.1 in 2028, before hitting the Fed's 2% target in 2029, the projections show.

The main driver of inflation in the US has been energy - with gas and diesel prices pushed higher as a result of oil prices rising around the world due to the US-Iran war.

Michael Race
Business and economics reporter

As well as announcing the latest interest rates decision, the Federal Reserve has released its latest economic projections showing where board members see rates going from here.

Most policymakers think that rates will be hiked again before the end of this year to between 4-4.25%, and a small majority believe they could rise to the 4.25-4.5% next year.

The projections suggest rates could be lowered later, as we move into 2028 and 2029.

But remember: It's important to note that these are just predictions based on how the future might look - as we have seen through previous economic shocks caused by Covid and wars, things can change quickly.

• The Fed has announced that rates are rising - the first increase in three years
• It raised rates from 3.5-3.75% to 3.75-4%
• The board voted unanimously, 12-0
• However, this was expected, our business reporter writes
• The Fed's forecasts also suggest another increase could happen before the end of the year

Image source, Getty Images

In announcing the hike, the Fed also highlights bright spots and says economic activity is expanding "at a solid pace".

"While uncertainty remains elevated owing, in part, to geopolitical developments, domestic spending has been resilient," it also says in its statement.

"Productivity growth is strong, and capital investment is robust. Job gains have kept pace with the workforce, and the unemployment rate has changed little," its statement says.

The main concern - and the one leading to the first rise in three years - is that "inflation remains elevated" (our business reporter explained why that is earlier).

Anthony Zurcher
North America correspondent

Image source, Reuters

The Fed has announced, as expected, that the Fed is raising interest rates. Now comes the less certain part: How will Donald Trump react?

In the past, the president has been sharply critical of the Fed’s interest rate moves, claiming former Chair Jerome Powell was too slow in lowering rates when it appeared inflation was under control.

His words were less sharp about the prospect of a hike now that Warsh has been in the post. But with a higher rate now a reality, will the mercurial president change his attitude?

Trump – and his Republican allies – had been hoping good economic news would improve their prospects in November’s midterm congressional elections. A rate hike, however, is the latest sign that prospects of such a positive turn are rapidly dimming.

That won’t sit well with the president, whether he acknowledges it or not.

Michael Race
Business and economics reporter

There was resounding agreement among Fed policymakers to raise rates - all 12 voted in favour a rise.

An expected move, which the Fed hopes will ease affordability in the long termpublished at 19:01 BST

19:01 BST

Michael Race
Business and economics reporter

Rates being increased was almost a nailed-on certainty by financial traders, so the decision will not come as a surprise to banks and other money lenders.

They may have already factored in higher rates to their own lending and savings products.

It's clear the Fed deems prices are rising too fast and interest rates need to go up to limit inflation.

However, with Donald Trump calling for rates to be cut, all eyes will turn to see how the president reacts.

This decision won't be welcomed by people looking to borrow cash, but the central bank will hope the move will - over time - ease the cost of living for Americans.

The US Federal Reserve has raised interest rates for the first time in three years.

The Fed has increased its rate from 3.5%-3.75% to 3.75%-4%.