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Fed Raises Interest Rate, Plans 3 More Hikes in 2017
The Federal Reserve has raised its prime interest rate by one-quarter percentage point to a range of 0.5%-0.75%, signaling growing optimism about the U.S. economy.
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The Federal Reserve has raised its prime interest rate by one-quarter percentage point to a range of 0.5%-0.75%, signaling growing optimism about the U.S. economy.
The hike comes a year after an earlier quarter-point hike, the central bank’s first increase in more than nine years. The announcement triggered a 119-point drop in the Dow Jones Industrial Average on Wednesday, ending a seven-session series of record highs that brought the index close to an all-time high of 20,000 points.
The Fed previously said it planned two more small rate hikes in 2017. It now plans for three increases next year. Analysts predict those adjustments also will be made in quarter-point steps.
Chairwoman Janet Yellen emphasizes that Fed won’t make any further move until a “cloud of uncertainty” clears about president-elect Donald Trump’s economic plan. Trump has touted tax cuts and increased government spending, a duo that economists point out could simultaneously accelerate economic growth and inflation.
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