The European Central Bank has raised its benchmark interest rate to 2.25% from 2% in an effort to combat inflation fueled by the Iran war. This move comes ahead of rate-setting meetings next week at the Fed, the Bank of Japan, and the Bank of England.

Inflation Concerns

Oil prices have risen sharply due to Iran’s actions, leading to higher costs for products made from crude oil, such as gasoline and heating oil. The ECB’s goal is to dampen consumer price inflation, which has reached 3.2% in the 21 countries that use the euro currency, above the ECB’s target of 2%.

The U.S. Federal Reserve is expected to keep its key interest rate unchanged when it meets next week, but may change its statement to remove language suggesting a future rate cut. Many Fed officials have warned that if inflation doesn’t begin to cool soon, a rate hike may be necessary by the end of the year.

Original reporting: KTBS 3 (Shreveport) — read the source article.