US interest rates raised for first time in three years

US interest rates have been raised for the first time in more than three years and could be increased further in a bid to slow rising prices.Rates were hiked to 3.75%-4% from 3.5%-3.75% by the Federal Reserve in a unanimous decision despite fierce opposition from President Donald Trump, who had called for rates to be cut.Fed Chair Kevin Warsh said the move was because "inflation is too high and has been for too long", adding that it was a "sober" and "responsible decision".However, Trump said rates "should be 1%, or less, because we are the Best Credit in the World - BY FAR".Higher interest rates make borrowing more expensive for people wanting to secure loans, mortgages, and credit cards, but can lead to better returns on savings.Warsh said during a press conference on Wednesday following the decision that, while there was "an attitude of optimism" within the Fed leadership, inflation remained a problem.Central banks tend to increase rates when inflation is high to discourage spending and encourage saving in the hope this will reduce the pace of price rises.But it's a balancing act, as higher rates can also encourage businesses to hold off on investing and hurt economic growth.