Charting the global economy: Fed officials raise interest rates

The Federal Reserve raised interest rates for the first time since July 2023 and penciled in an additional hike before the end of the year — steps aimed at containing inflation.

In his remarks after the Fed meeting, Chairman Kevin Warsh restated his concerns about inflation, saying too many categories of goods and services were showing annualized price gains above 3% on a 6- and 12-month basis.

The Bank of Japan also raised rates. Its hike came just three months after the BOJ’s previous increase. That marks the shortest interval between such moves since 1990, when the central bank’s rapid policy tightening played a key role in bursting Japan’s asset bubble.


Meanwhile, the Bank of England held rates steady but indicated tighter policy may be needed if inflationary pressures intensify because of war in the Middle East.

Here are some of the charts that appeared on Bloomberg this week on the latest developments in the global economy, markets and geopolitics:

US

The Federal Open Market Committee voted to increase the benchmark federal funds rate to a range of 3.75% to 4%. Fed officials also signaled growing support for a series of rate hikes. Less than four months after being sworn in as Fed chairman in May, Warsh has defied skeptics with a unanimous decision to deliver the Fed’s first interest-rate hike in over three years. Hours later on social media, President Donald Trump demanded that rates be quickly cut to 1% or lower.

The costs of diesel and home heating oil have surged faster than gasoline in recent months, particularly hammering US states that are critical battlegrounds in November’s midterm congressional elections — just as mail-in ballots arrive.

Europe

Six of nine BOE policymakers chose to leave rates unchanged, including Governor Andrew Bailey, as the committee split along the same lines as in their last meeting in July. Still, “the longer this volatility persists, the bigger the impact it will have on inflation, and the more likely it is we will need to raise Bank rate,” the governor said.

In the early 2000s, Britain had as many as 10 young workers for every person over-65 with a job. Today there are just two, as older employees hang on for longer and first jobs are harder to come by. The number of Britons aged 65 and over in work topped 1.7 million earlier this year, according to the latest Office for National Statistics figures.

Asia

The BOJ lifted its policy rate by a quarter point to 1.25% and signaled it’s open to further tightening. Still, the move ultimately disappointed yen traders who wanted clearer guidance on the central bank’s next move. Governor Kazuo Ueda said that with the price trend very close to the bank’s 2% target, authorities now need to ensure inflation doesn’t overshoot.

China’s credit expansion fell well short of expectations in August from a year ago, as subdued borrowing by households and businesses outweighed the support from government bond sales. Financial institutions extended just 60 billion yuan of new yuan loans in the month, less than a sixth of the median forecast of 404 billion yuan.

Emerging Markets

Brazil’s central bank cut its interest rate by a quarter-point as inflation slows and the economy fades, just weeks before a tight presidential election that is fueling uncertainty over how much more policymakers can ease.

Argentina’s economy contracted in the second quarter for the first time in two years, marking a setback for President Javier Milei’s administration. Exports were the only category that drove growth in the quarter along with a pullback in imports. Government expenditure, consumer spending and capital formation all declined on a quarterly basis.

World

The AI boom is creating wealth far beyond the companies building the models and designing the chips. It’s enriching the “picks and shovels” sellers, or firms that make often overlooked industrial products or the obscure hardware, materials and equipment needed to build the infrastructure.

Gold extended its recovery at the end of a volatile week as oil fell and traders weighed the Fed’s rate path after its first hike since 2023. Investors have been flocking to bullion in recent weeks, betting that the long-term drivers of the metal will endure. Gold-backed exchange-traded funds tracked by Bloomberg had eight consecutive days of inflows, the longest streak since October 2025.

Aside from the decisions by central banks in the US, UK, Japan and Brazil, Armenia, Mongolia and Ukraine raised interest rates. Taiwan, Pakistan, Uzbekistan and the Czech Republic kept interest rates unchanged. Officials in Angola reduced borrowing costs.