Federal Reserve Raises Interest Rate
By: KLKN Newsroom
Courtesy: ABC News
The Federal Open Market Committee (FOMC) announced today that it was raising short-term rates by a quarter point — the first increase in nine years.
The unanimous decision had been widely expected by investors after Federal Reserve officials, including Chairwoman Janet Yellen, had hinted that the central bank was ready to change direction after keeping interest rates between zero and one-quarter percent since December 2008 to encourage spending and bolster the economy.
The Fed’s decision will mean more money for savers but also higher borrowing rates for students, new homeowners and new car buyers. The last time the Fed raised rates was in June 2006.
The FOMC said in a statement that it "currently expects that, with gradual adjustments in the stance of monetary policy, economic activity will continue to expand at a moderate pace and labor market indicators will continue to strengthen. Overall, taking into account domestic and international developments, the Committee sees the risks to the outlook for both economic activity and the labor market as balanced. Inflation is expected to rise to 2 percent over the medium term as the transitory effects of declines in energy and import prices dissipate and the labor market strengthens further. The Committee continues to monitor inflation developments closely."
U.S. markets were in positive territory following the Fed’s decision.
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