The Federal Reserve raised interest rates on Wednesday for the first time in more than three years, a unanimous decision that puts the central bank on a collision course with the president who chose its chair four months ago.

The Federal Open Market Committee voted 12-0 to lift its benchmark rate by a quarter percentage point, to a target range of 3.75% to 4%. It was the first increase since July 2023, and it arrived with a signal that another is likely before the year is out: updated projections showed 16 of 18 officials expecting at least one more hike, with four of them seeing two.

"Inflation remains elevated," the committee said in its post-meeting statement. "Today's policy action will support a timelier return to the Committee's 2 percent goal. The Committee will deliver price stability."

Chair Kevin Warsh, installed by President Donald Trump in May after Jerome Powell's term ended, was blunter at his press conference. "The plain fact is that inflation is too high and has been for too long," he said. "We must be confident that underlying inflation is moving to our objective clearly and at sufficient speed. Today, the FOMC decided that this standard has not been satisfied."

The backdrop is a gas-pump-and-grocery-bill economy that has voters anxious less than 50 days before the midterm elections. Consumer prices rose 3.4% last month. The Fed's preferred gauge, headline personal consumption expenditures, is now projected at 3.7% this year with core at 3.4% - both nudged higher since June - and officials do not see the 2% target arriving until 2029.

The drivers are unusually visible. Tariffs on most trading partners, the U.S.-Israel war with Iran, and a spending boom in artificial intelligence have pushed costs up from several directions at once. Oil has climbed toward $109 a barrel, a benchmark Treasury yield touched a 19-year peak, and the average price of a gallon of gas reached $4.36 - up 14 cents in a week and from $3.18 a year ago, according to AAA.

Trump did not wait long. Roughly three hours after the decision he wrote on Truth Social that rates "should be 1%, or less, because we are the Best Credit in the World - BY FAR," adding: "LOWER THE INTEREST RATES FOR THE UNITED STATES OF AMERICA, AND FAST!" Asked what his message for the president was, Warsh replied: "I've got nothing for you on a discussion with the president."

Markets took it badly - the Dow fell 500 points - and major U.S. banks immediately raised their prime rates. Credit card and home-equity borrowers on variable rates will see minimum payments rise within about a month; savers, for once, get the better end of the trade.

The politics may prove the sharper edge. Fed independence has been the subtext of every Trump-Fed exchange since Powell's tenure, and the irony of Wednesday is hard to miss: the chair chosen to deliver cheap money delivered the opposite - publicly, unanimously, with the midterms closing in.

Sources: CNBC | BBC | Al Jazeera