Federal Reserve raises interest rates and signals more increases this year

BY SONNET SWIRE
Posted on JUN 13, 2018

Officials no longer view the United States economy as needing a boost from the Great Recession 10 years go.

The Federal Reserve raised interest rates by a quarter of a percentage point on Wednesday and hinted that it will raise rates two more times this year in a shift driven by officials' insistently rosy assessment of the economy, according to The New York Times.


A statement released towards the end of the Fed's two-day meeting took several steps to show officials no longer view the United States economy as needing a boost from the Great Recession 10 years go, and are instead beginning to worry more about the threat of inflation.


"The economy is doing very well. Most people who want to find jobs are finding them," Fed Chairman Jerome H. Powell said on Wednesday at a news conference. "Ongoing job gains are boosting wages and confidence."


The Times reported that officials noted that economic activity has been rising "at a solid rate" a change from their statement just last month when they called the rate "moderate." Quarterly economic projections released at the meeting showed Fed officials expect the economy to grow at a 2.8 percent rate this year, up from a 2.7 percent forecast in March. Officials also now predict the unemployment rate to dip to 3.6 percent by year's end, down from a forecast of 3.8 percent in March.


Wednesday's rate increase was the second this year and the seventh since the end of the Great Recession. It was widely expected and brought the Fed's benchmark rate to a range of 1.75 to 2 percent, according to the Times

 

 

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