June 14, 2018
The Federal Reserve voted unanimously to raise its benchmark rate by a quarter-percentage point to a range between 1.75% and 2%. That marks the second rate increase this year, and the money policymakers indicated a total of four increases are on the docket for 2018. That’s one more than was projected at its March meeting.
Fed Chairman Jerome Powell said, “The decision you see today is another sign that the U.S. economy is in great shape. Growth is strong. Labor markets are strong. Inflation is close to target.”
The rate increases are being used to help keep the economy at an even keel, and to prevent it from overheating. Part of what’s got the Fed feeling so rosy about the economy is an upturn in global growth that began last summer, as well as Congress approving a stimulus via tax cuts and increased federal spending.
Rates are expected to be raised at least three more times next year and at least once in 2020, to arrive at a range between 3.25% and 3.5% by the end of 2020, which is the same end point officials projected in March.
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