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".

After the announcement, Trump expressed support for Warsh but said the Fed board, which votes on rate decisions, was "hostile".

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.

Like many central banks, the Fed has a target of keeping inflation at 2% or below. Warsh noted that US inflation has been above the target "for more than five years".

That has helped make affordability one of the top concerns of American voters, who have seen fuel prices surge in response to soaring wholesale oil prices since the start of the US-Israel war with Iran. This has driven up the cost of many goods and services, as well.