The Fed raised interest rates for the first time in three years to fight inflation, which is bad news for borrowers, homebuyers, and stock investors, and a clear signal that the Iran war is doing real economic damage.

• The Fed hiked rates unanimously and expects to hike again this year, citing a strong job market but rising inflation.
• Steve Hanke, a former Reagan economic adviser, blames the Fed for growing the money supply too fast since COVID, with the war piling on top.
• Both the Strait of Hormuz and the Red Sea are effectively closed, and Saudi oil exports have stopped after Houthi attacks, sending diesel and fertilizer prices soaring.
• Mortgage rates will stay high or rise further, credit cards and loans will cost more, and the housing slump will drag on.
• The stock market is in a bubble propped up by wealthy spenders, and higher rates raise the odds it pops and drags consumer spending down.

Outlook: Expect months of uncertainty as Trump stays stuck in the Iran war, Iran keeps control of the Strait of Hormuz, and the Fed keeps tightening; gold and silver dipped on the hike but Hanke still sees a long-term bull market.