ibusinesslines.com
ibusinesslines.com August 15, 2018


Fed Raises Interest Rates, Signals 2 More Hikes This Year

14 June 2018, 05:43 | Kelvin Horton

Fed Chairman Jerome Powell

Fed Chairman Jerome Powell

That puts the Fed on track for four rate hikes total in 2018, something the Fed hasn't done since 2006.

According to CNBC, the Reserve released new data this week showing the GDP forecast rose to almost 3%, up from the previous predictions of 2.7%.

Policy makers said in a one-page statement that the labor market "has continued to strengthen" and than economic activity "has been rising at a solid rate". "Higher rates and higher payments will squeeze the buying power of households without a compensating increase in wages".

Job growth has consistently outperformed in recent years, driving unemployment down to 3.8 percent in May, the lowest reading since 2000.

It is the seventh time the bank has raised rates since 2015.

Growth is also expected to stay close to nearly 3 percent of GDP through the year, and Fed officials are eager to prevent the economy from overheating.

This will raise borrowing costs for credit cards, auto financing, mortgages, and other loans, but help savers earn more interest on their deposits.

Also notable was that the Fed deleted about 80 words of its statement that said it expected the economy to "evolve in a manner that will warrant further gradual increases" in rates.


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.

On inflation, policy makers forecast a slight overshoot of their target starting in 2018 at 2.1 per cent, and running through 2019 and 2020, compared with a 2020 overshoot in March's projections.

Wholesale price inflation came in much hotter than expected which was in contrast to Tuesday consumer price index.

Eurozone industrial production dropped -0.9 month over month in April, more than feared and leaving the annual rate at 1.7% year over year. He'll likely address the decision to hike rates and the Fed's views on the overall economic outlook.

USA central bankers again emphasized on Wednesday that the goal is "symmetric", and they said in minutes of the May meeting that "a temporary period of inflation modestly above 2 per cent" would help anchor long-run inflation expectations around the target.

Yields earlier swung between gains and losses as investors awaited guidance about whether policy makers see enough pressure on prices to increase their projected pace of interest rate increases, or whether concerns about the ability of the economy to sustain its growth in coming years might lead to a pullback in forecasts of rate increases in coming years, analysts said.

The median estimate for economic growth this year rose to 2.8 per cent from 2.7 per cent in March, with projections unchanged for 2.4 per cent in 2019 and 2 per cent in 2020.



Other News

Trending Now

Teaser Trailer for Disney's Live-Action 'Dumbo' Movie from Tim Burton
Burton's first extensive use of CGI for Disney came in the 2010 film " Alice in Wonderland ". The new trailer includes shots of the circus and even a fleeting glimpse of Dumbo in flight.

Migrants on stranded vessel to be taken to Spain
Under EU rules migrants must apply for asylum in the European country where they first arrive. But the charity has a new and more pressing problem: Italy's new government.

God Of War Getting New Game Plus
However, an interesting caveat is that the difficulty will be increased, so it won't be a cake walk. With the exception that we really didn't get any other information regarding the new game mode.

Trump blasts 'haters & losers' in typo-filled tweet from Singapore
In Singapore , the entire world is focused on the high stakes summit as Kim meets with President Trump. Heavy security and armed police are standing guard at summit-related venues across the city state.

Raccoon Scales Minnesota Skyscraper, Captivating Anxious Viewers
Internet-addicts among us may now have heard of #MPRraccoon , the creature seen climbing up the side of a 25-storey tower in St. Many expressed concern for the raccoon's safety - wondering aloud about possible rescue scenarios.

Geraint Thomas wins the Criterium du Dauphine ahead of Adam Yates
Thomas came in second, managing to put further valuable seconds between himself and his rivals for the yellow leader. We're getting closer and closer so I'm happy to get confidence from this race.

Farrah Abrahm Arrested For Striking Security Guard
A source tells us Farrah was heard playing the "I'm a celebrity" card - yelling things like. you should know who I am. She explained in the clip, which she shared with her 1.3 million Instagram followers: 'This booty cheek's done.