WASHINGTON (AP) — The Federal Reserve took note of a resilient U.S. economy Wednesday by raising its benchmark interest rate for the second time this year and signaling that it may step up its pace of rate increases.
The Fed now foresees four rate hikes this year, up from the three it had previously forecast. The action means consumers and businesses will face higher loan rates over time.
The central bank raised its key short-term rate by a modest quarter-point to a still-low range of 1.75 percent to 2 percent. With the economy now nine years into an expansion, the move reflects the steadiness of growth, the job market’s strength and inflation that’s finally reaching the Fed’s 2 percent target level.
Economists said the Fed left little doubt that it’s prepared to increase the pace of its credit tightening to guard against high inflation later on.
“The labor market is getting tighter, and price pressures are picking up,” said Greg McBride, chief financial analyst at Bankrate.com. “The Fed is prepared to be quicker about pushing rates higher.”
It was the Fed’s seventh rate increase since 2015, and it followed an increase in March this year.
The announcement helped resolved a debate in financial markets over whether …read more
Source:: Time – Business