Fed hikes interest rates again, raises outlook for more increases in 2018

Fed hikes interest rates again, raises outlook for more increases in 2018

Fed hikes interest rates again, raises outlook for more increases in 2018

The central bank's new median forecast projects the Fed's benchmark rate at 3.1 percent by the end of 2019, up from 2.9 percent in the previous forecast.

"For the first time in many years, the Fed has nearly complete confidence about the outlook", said Michael Gapen, chief USA economist at Barclays Capital Inc.in NY.

Interest rates are expected to increase to 3.1% next year, up from the previous forecast of 2.9%.

The Federal Reserve on Wednesday announced that it chose to raise interest rates, and it signalled plans to do so more times than expected this year.

This hike, which was widely expected, is the Fed's second of 2018, and the central bank signalled it is likely to do two more increases by the end of this year.

The Fed anticipates that inflation will overshoot its 2% target this year; in March, officials saw that happening only in 2020.

While many economists think the current expansion will exceed the 1990s streak, some worry about what might occur once the impact of the tax cuts begin to fade and the Fed's gradual rate hikes begin to curb growth.

Most officials also expect the Fed will have to raise rates at least three times in 2019 and then at least once in 2020.

The central bank also lifted its growth forecast to 2.8 per cent this year, up a small amount from its projection of 2.7 per cent annual growth in March.

Fyre Festival Founder Billy McFarland Arrested On More Fraud Charges
The document continues on to explain that McFarland, "will face criminal charges on top of those to which he already pled guilty". Back in March , Billy McFarland pled guilty to two counts of federal wire fraud in connection to the Fyre Festival scandal.

Press conference after every meeting would give the Fed more room to make decisions as the economy warrants, and to be less choreographed. In fact, the Fed didn't change its median longer-run growth estimate of 1.8 percent. The committee's forecast for the long-run sustainable growth rate of the economy held at 1.8 per cent, suggesting policy makers are skeptical of the effect of tax cuts on the economy's capacity for growth.

The committee sees further declines the unemployment.

"In view of realized and expected labor market conditions and inflation, the Committee chose to raise the target range for the federal funds rate to 1-3/4 to 2 percent", the Fed said in a statement. On a 12-month basis, both overall inflation and inflation for items other than food and energy have moved close to 2 per cent. Indicators of longer-term inflation expectations are little changed, on balance. Risks to the economic outlook appear roughly balanced.

In comparison, the Reserve Bank kept Australia's official cash rate at 1.5 per cent, its record low for the past 20 months.

Fed repeats that stance of monetary policy remains accommodative.

The rate increase was in line with investors' expectations and showed policymakers' confidence in the economy's growth prospects, continued low unemployment and steady inflation. Previously, the statement made separate references to survey-based and market-based measures of such expectations.

"In determining the timing and size of future adjustments to the target range for the federal funds rate, the Committee will assess realised and expected economic conditions relative to its maximum employment objective and its symmetric 2 per cent inflation objective".

"Voting for the FOMC monetary policy action were Jerome H. Powell, Chairman; William C. Dudley, Vice Chairman; Thomas I. Barkin; Raphael W. Bostic; Lael Brainard; Loretta J. Mester; Randal K. Quarles; and John C. Williams".

Recommended News

  • USA  reveals ZTE settlement details, ban still in place

    USA reveals ZTE settlement details, ban still in place

    The Chinese company has been accused of violating USA sanctions by selling sensitive equipment to both North Korea and Iran. ZTE is not allowed to take any action or make any public statement, even indirectly, denying any of the allegations.
    Oil Prices Are Too High

    Oil Prices Are Too High

    USA production rose to 10.9 million barrels a day in the week, but Kilduff said the market appeared able to absorb the increase. The IEA report comes a day after OPEC warned of "considerable uncertainty as to world oil demand".
    World Blood Donor Day on June 14

    World Blood Donor Day on June 14

    In fact, for the past four years, new Red Cross donors have declined by about 80,000 each year. Transfusion of blood and blood products helps save millions of lives every year.
  • Trump wants to stop provocative 'war games' with South Korea

    Trump wants to stop provocative 'war games' with South Korea

    President Trump's meeting with Kim Jong-un affects Koreans living in Kansas who fear for the safety of their loved ones in Asia. There is a " huge difference between the two ", the anonymous official said.
    Houthi Leader's Brother May Be Dead in Offensive on Yemen's Hodeidah

    Houthi Leader's Brother May Be Dead in Offensive on Yemen's Hodeidah

    The United Nations and other aid groups already had pulled their worldwide staff from Hodeida ahead of the rumoured assault. Saudi Arabia's Western allies, which sell arms to coalition states, have not said publicly if they approve of the assault.
    Fred expected to complete Manchester United move in next seven days

    Fred expected to complete Manchester United move in next seven days

    The Belgian has been heavily linked with a move to Old Trafford and is believed to be keen on joining the Red Devils . Today, an update on Manchester United's move for Danny Rose and Marco Verratti has been offered to Jose Mourinho ...
  • The Last of Us Part II Gameplay Trailer Unveiled

    The Last of Us Part II Gameplay Trailer Unveiled

    The main protagonist, Ellie, stealthily moves about, eliminating enemies until discovered, requiring her to flee. On top of that, enemies appear to be more coordinated now, and Naughty Dog's overhauled engine looks wonderful .
    NCAA eases rules on athlete transfers, redshirts for college football

    NCAA eases rules on athlete transfers, redshirts for college football

    The significance of the rule is a player can appear in those limited number of games at any point in the season. Even with the new rule, conferences could still restrict athletes from transferring within the league.
    Tony Award Windfall to Boost 'The Band's Visit'

    Tony Award Windfall to Boost 'The Band's Visit'

    Another member of the show's cast, Nathan Lane , picked up the Best Featured Actor in a Play accolade. She said she was happy to be in a production that "celebrates diversity and individuality".
  • Next-generation Xbox console to reportedly launch by 2020

    Next-generation Xbox console to reportedly launch by 2020

    In addition, the Xbox Game Pass $9.99 monthly subscription does offer an incredibly hefty amount of content for the cost. The company refreshed the line up with the Xbox One X , a more powerful version of the device previous year .
    Love Island's Kendall 'gutted' to be first contestant dumped

    Love Island's Kendall 'gutted' to be first contestant dumped

    The contestant found herself drawn to Adam Collard - a decision which eventually left her booted off the ITV2 reality show. Look, we get it, they're a gorgeous looking bunch of girls, but jaysus ladies, read a newspaper once in a while.
    #SC1: Katie Arrington Vanquishes Mark Sanford

    #SC1: Katie Arrington Vanquishes Mark Sanford

    Bruce Poliquin will attempt to defend his seat against the victor of a three-person Democratic primary featuring state Rep. Katie Arrington (R-Dorchester) defeated Sanford, earning more than 51 percent of the vote to Sanford's 46 percent.

We are pleased to provide this opportunity to share information, experiences and observations about what's in the news.
Some of the comments may be reprinted elsewhere in the site or in the newspaper.
Thank you for taking the time to offer your thoughts.