Time: 8:41 p.m. CEST
The Federal Reserve raised its interest rate by quarter point from 0.5 to 0.75 percent and from 0.75 to 1.0 percent to on Wednesday after a two-day policy meeting in Washington. Fed officials launched, “what investors expect to be a more rapid series of increases that will help ward off the threat of inflation but also raise costs for indebted American households,” the Washington Post writes.
One member of the Federal Open Market Committee did not support the measure, supported by other nine members. The Times reports that, “Neel Kashkari, the president of the Federal Reserve Bank of Minneapolis, voted against the measure.” Higher interest rates will increase payments of Americans for mortgages, auto loans and credit card purchases.
“Overall, we continue to expect the economy would expand in moderate pace over the next few years,” Federal Reserve chair Janet Yellen said announcing raise of benchmark rate by a quarter point.
The Post says the Fed would increase rates three times in 2017, projecting that a rate would be 1.4 percent by the end of this year, plus forecast for three more rate hikes next year. Higher interest rates could influence to economy’s growth and likely would attract global investment, says the Post. The rate hikes could incite disagreements between the Fed and a president about further measures. The Fed probably wants to stabilize its balance sheet, which rose from $900 billion to about $4,5 trillion.
- Reuters: Governing Interest