Fed interest rate: Federal Reserve hikes interest rate another quarter point today

Federal Reserve raises interest rates

Federal Reserve raises interest rates

The Federal Reserve raised USA interest rates again on Wednesday, the seventh increase since 2015 when the central bank resumed raising rates after the last recession.

That implies four total rate increases this year.

The 3.8-percent jobless rate is close to the lowest level ever seen in the U.S. There are more job openings than workers seeking employment in the country for the first time in recorded history, and recent inflation data shows prices inching through the Fed's ideal threshold. US companies are hiring at a rapid pace and consumer and business spending remains healthy, the Fed noted, and core inflation is finally expected to hit the central bank's target of 2 percent this year.

The Federal Open Market Committee indicated that even though it's stepping up the pace of interest-rate hikes, economic growth should continue apace.

Estimates of longer-run interest rates were unchanged and seen reaching as high as 3.4 percent in 2020 before dropping to 2.9 percent in the longer run.

Following the Fed's rate decision, the FOMC releases its statement regarding monetary policy.


The Fed said its policy of further gradual rate increases will be "consistent with sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee's symmetric 2 percent objective".

USA unemployment dropped to 3.8% in May, its lowest level since April 2000 and one of the lowest levels since the second world war. Investors had given just over a 91 percent chance of a rate rise on Wednesday, according to an analysis by CME Group.

Interest rates are going up again as the economy gets hotter.

Fed says setting ioer rate 5 basis points below top of target range for funds rate aims to keep market rates well within range.

The unemployment rate is 3.8%, the lowest since 2000 and tied for the lowest reading since 1969. Officials have also set in motion a plan to reduce the Fed's bond holdings, as the central bank moves away from accommodative policies employed during and after the 2008 financial crisis.

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