The US central bank, the Federal Reserve (Fed), is likely to raise interest rates in the future for several reasons:

• To combat inflation. Inflation is the rate at which prices for goods and services rise over time. The Fed has a target inflation rate of 2%, but inflation has been running much higher than that in recent months. In June 2023, the Consumer Price Index (CPI), a measure of inflation, rose 9.1% year-over-year, the highest rate since 1981. The Fed believes that high inflation is harmful to the economy, and it is raising interest rates in an effort to bring inflation back down to its target level.
• To prevent the economy from overheating. An overheating economy is one in which economic growth is happening too quickly, which can lead to inflation and other problems. The Fed believes that the US economy is currently at risk of overheating, and it is raising interest rates to help cool things down.
• To maintain the value of the US dollar. The US dollar is the world's reserve currency, meaning that it is used in many international transactions. When the Fed raises interest rates, it makes the US dollar more attractive to foreign investors, which helps to support the value of the dollar.

The Fed has already raised interest rates several times in 2023, and it is expected to continue raising rates in the future. Economists are divided on how much the Fed will raise rates, but most believe that the Fed will need to raise rates above 5% in order to bring inflation under control.

It is important to note that raising interest rates can have negative side effects. For example, it can make it more expensive for businesses to borrow money, which can lead to slower economic growth and job losses. However, the Fed believes that the benefits of raising interest rates outweigh the costs, given the current high level of inflation.

In addition to the reasons listed above, the Fed may also raise interest rates in the future if it sees signs of other economic problems, such as a sharp increase in unemployment or a significant decline in business investment.