Fed lifts rates amid stronger inflation, drops crisis-era guidance

14 Juin, 2018, 03:15 | Auteur: Auguste Feret
  • Fed lifts rates amid stronger inflation, drops crisis-era guidance

The Federal Reserve raised interest rates on Wednesday, a move that was widely expected but still marked a milestone in the USA central bank's shift from policies used to battle the 2007-2009 financial crisis and recession.

And a majority of policy makers said they now expect a total of four interest rate increases this year.

A majority of Fed officials also forecast two more rate rises this year, one more than previously predicted.

Economists said the Fed left little doubt that it's prepared to increase the pace of its credit tightening to guard against high inflation later on.

Announcing the decision to increase its target for the fed-funds rate to a range of 1.75% to 2%, the Fed described the United States jobs market as "strong" and said economic activity had been rising at "a solid rate".

Greg McBride, chief financial analyst for the interest rate website Bankrate.com, said that could "squeeze" families if wage growth remains sluggish.

It was the Feds seventh rate increase since it began tightening credit in 2015, and it followed an increase in March this year.

The Fed move came after a two-day meeting where its members discussed the robust state of the USA economy and the potential impact of a trade war amid rising tension between the U.S. and its largest trading partners.

Tiffany Haddish infuriated Sanaa Lathan's family with Beyoncé bite story
DiCaprio was once (and still is?) a member of the famous "pussy posse" with friends Tobey Maguire and Kevin Connolly . "I was just trying to say how Beyoncé kept me from goin" to jail that night.

Ariana Grande a finalement trouvé l’homme qu’il lui fallait !
De sa part, Pete Davidson s'est également fait tatouer le logo sa bien-aimée, derrière l'oreille, ainsi que ses initiales sur la main.

KKR nears agreement to acquire Envision for about $5.5…
Pursuant to the closing of the deal , Envision shares will be delisted from the NYSE, as it will be cease to be a public company. Ten analysts have made estimates for Envision Healthcare's earnings, with estimates ranging from $2.07 billion to $2.11 billion.

The latest rate increase was in line with investors' expectations ahead of the release of the policy statement.

But Powell added, "For now, we don't see that in the numbers at all".

The policy statement bypassed discussion about the tensions over the Trump administration's trade policies, including a decision two weeks ago to impose tariffs on steel and aluminium imports from the European Union, Canada and Mexico. That's good news because it means the economy is largely moving on its own steam in the eyes of the Fed. This was the second hike this year, up from March's increased range of 1.5 to 1.75 percent.

With the unemployment rate at 3.8 percent - a level reached only twice before in the past half-century - Fed Chairman Jerome Powell and his colleagues have decided additional rate hikes will very likely be necessary later this year. Unemployment, now at an 18-year low of 3.8 per cent, would drop to 3.6 per cent by year's end and to 3.5 per cent in 2019 and 2020 - levels not seen in 49 years.

Beginning in 2008 in the midst of the financial crisis, the Fed had kept its key rate unchanged at a record low near zero for seven years.

Powell faces a tricky balancing act as the Fed attempts to bring interest rates toward historical averages.

After keeping interest rates low for years to boost growth, the central bank is now moving rates back to what economists say is a neutral position. When the Fed tightens credit, it aims to do so without derailing the economy.

Conseillé:



Populaire

Shameful handling of migrant ship shows need for EU asylum reform
In practice, this has placed a heavy burden on Italy and Greece, where hundreds of thousands of people have entered in recent years.

Federal Reserve bumps up United States interest rate, signals two more in 2018
The Fed anticipates that inflation will overshoot its 2% target this year; in March, officials saw that happening only in 2020. Powell has repeatedly played down the dot plot as a guide to future interest rates, though investors continue to focus on it.

L'Etat s'appropriera tous les actifs d'ADP y compris le foncier
Le gouvernement français tient son nouveau cadre juridique adapté pour des cessions dans ADP ( Aéroports de Paris ), Engie et la Française des Jeux .

Jada Pinkett Smith reveals her grandmother taught her about 'self-pleasuring'
Jada asked what her daughter's feelings were about that incident and Willow said she had simply "overstepped a boundary". That intuition. "You know, when you can talk to your mother who's been through a whole lot in regards to sex".

North Korean media praises Trump-Kim summit as 'meeting of the century'
Xi met twice with Kim before Singapore and retains a strong influence on the situation - China even lent Kim a plane to get to the summit.

Student-athletes no longer need permission from schools to transfer
As expected, the NCAA's Division I Council adopted a new rule Wednesday that will change the way transfers take place. Once the individual's name is in the database, coaches at other institutions have free reign to contact the student.

Few showers, storms possible Tuesday: Hot and humid rest of the week
In fact our in house computer model doesn't even have rain at all tonight while other computer models keep at least a chance. We can expect mostly cloudy skies with perhaps some sunshine breaking through the clouds later this afternoon .

Who To Watch On The Tony Awards Tonight
A selection of " Mean Girls " was near the top of the show, one of several productions that would be featured during the ceremony. Andrew Garfield picked up the first award of the night for Best Actor in a Play for his role in Angels in America .

Nicki Minaj Talks Being Single for First Time Since Age 15
Minaj dated rapper Safaree Samuels for almost 12 years until they called it quits in late 2014. "Becoming single was one of the things that made me feel strong and powerful", she says.

Clippers Rumors: The best way to trade up for Luka Doncic
It's tough to determine which player would be included in the deal, but the favorite would likely have to be Tobias Harris . Doncic would give the franchise a foundation and perhaps more of a "sure thing" than their two lottery picks could provide.