Federal Reserve poised to raise interest rates

Fed raises rates for 3rd time this year with 1 more expected

Fed raises rates for 3rd time this year with 1 more expected

Those show that the Fed's policymakers think it will raise rates five more times by the end of 2020, which bring rates up to a range of 3.25 to 4.25 percent.

The Fed lifted its short-term rate - a benchmark for many consumer and business loans - by a modest quarter-point to a range of 2 percent to 2.25 percent.

Federal Reserve Chairman Jerome Powell and the Federal Reserve headquarters in Washington, D.C.

As of 4:30 PM Eastern standard time, gold futures are now trading fractionally higher, with the most active Comex contract now fixed at $1,205.60 a net gain of $1.20 today. The Fed funds futures market is now pricing in a 95.0% chance of a rate hike during today's FOMC meeting, meaning that investors should focus less on today's highly anticipated rate hike and focus more on Fed Powell's statement which will help the market determine whether we will have a fourth yearly rate hike in December and a rate hike next year as early as March. "Growth is running at a healthy clip, unemployment is low, the number of people working is steadily rising, and wages are up".

The rate hike came as no surprise to economists and other market experts. The Fed had used variations of that pledge in the seven years that it kept its key rate at a record low near zero and over the past almost three years in which it's gradually tightened credit.

Interest rate hikes have sped up under Chairman Jerome Powell in response to a robust economy, which will help curb inflation. For the first nine years of the economic expansion, annual GDP growth averaged only around 2.2 percent. Finally, Trump's continuous criticism of the Fed's rate hike plan might force the Fed to reconsider their initial rate hike plan.

Google reinstates cryptocurrency advertisements; technology giant’s move riles up community
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During Powell's press conference, he was asked about the economic risks of a trade war.

The Fed will give a big hint of what's coming when it releases its quarterly forecasts Wednesday. In August, the president said he was "not thrilled" with Powell, his own appointee, for hiking rates. Tariffs on an additional $200 billion of imported goods from China took effect Monday, along with retaliatory levies from Beijing. Powell will nearly certainly be asked about trade.

Price inflation, which had been sluggish, has also started to pick up, hitting the Fed's 2% target - and exceeding it by some measures.

Still, some analysts hold to a more optimistic scenario: That momentum already built up from the government's economic stimulus will keep strengthening the job market and lowering unemployment, already near a 50-year low. Household spending and business fixed investment have grown strongly.

In a statement the central bank said: "In view of realized and expected labor market conditions and inflation, the Committee chose to raise the target range for the federal funds rate".

Fed officials, in the statement, repeated their assessment that "risks to the economic outlook appear roughly balanced".

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