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Fed Hikes Rates by a Quarter-Point as Dot Plot Forecasts Fewer 2019 Increases


Thursday, 20 December 2018 02:38 WIB

FOMCThe FedEkonomi AS


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The Federal Reserve on Wednesday hiked its target for the federal funds rate by a quarter point to a range between 2.25% and 2.5% in a unanimous decision while the median projection of next year's rate increases was lowered to two from three.

The Fed also reduced its longer-run estimate for the federal funds rate to 2.8% from 3%, a signal that the central bank believes it's getting closer to the so-called neutral rate which neither stimulates nor restricts the economy.

That said, the FOMC statement kept language saying "further gradual increases in the target range for the federal funds rate" will be consistent with sustained expansion of economic activity, strong labor market conditions, and targeted inflation, modifying it only to say "some" moves were anticipated. The FOMC statement also kept its assessment that the risks to the economic outlook were "roughly balanced" while introducing a clause about monitoring "global economic and financial developments," a nod to the turmoil in financial markets as well as growth concerns overseas in countries including China.

Source : Marketwatch


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