With the stock market struggling over the last month it wasn’t a given that the Federal Reserve would raise interest rates, but it did follow through with a rate hike. CNBC reports:
The Federal Reserve raised its benchmark interest rate a quarter-point Wednesday but lowered its projections for future hikes.
As markets had expected, the central bank took the target range for its benchmark funds rate to 2.25 percent to 2.5 percent. The move marked the fourth increase this year and the ninth since it began normalizing rates in December 2015.
Officials, though, now project two hikes next year, which is a reduction but still ahead of current market pricing of no additional moves next year.
Key changes in the Fed statement:
1. Fed says that "SOME further gradual increases" in interest rates likely necessary
2. Fed says it will "monitor" global economic and financial developments
3. All 10 members voted for today's rate hike#Fed #economy— Heather Long (@byHeatherLong) December 19, 2018
Donald Trump will no doubt be perturbed by this increase. Tuesday he wrote, “I hope the people over at the Fed will read today’s Wall Street Journal Editorial before they make yet another mistake. Also, don’t let the market become any more illiquid than it already is. Stop with the 50 B’s. Feel the market, don’t just go by meaningless numbers. Good luck!”
Analysts say investors won’t be happy by this news either. As for what it means for consumers look for higher interest rates on mortgages, credit cards, and loans.
