Fed decision: Federal Reserve hikes rates to range of 1.75% to 2%, ups forecast to 4 hikes in ’18


The economy is revving up, and so the Federal Reserve is stepping up its plan to move interest rates closer to normal.As anticipated, the Fed raised its benchmark short-term interest rate Wednesday but it also upgraded its forecast from a total of three hikes this year to four amid an improving economy, falling unemployment and slightly stronger inflation.The move is expected to cascade through the economy, in particular nudging up rates for variable-rate consumer loans such as credit cards and adjustable-rate mortgages.It’s also likely to push up bank savings rates for Americans, especially seniors, who are finally realizing higher returns on CDs, bonds and other fixed-income assets after years of meager yields.”The main takeaway is the economy is doing very well,” Fed Chairman Jerome Powell said at a news conference. “Most people who want to find jobs are finding them.”The central bank lifted its federal fund rate – what banks charge each other for overnight loans – by a quarter percentage point to a range of 1.75 percent to 2 percent. That’s within shouting distance of its longer-run forecast of 2.9 percent. It’s the second rate hike this year and the seventh since the Fed began bumping up rates amid an improving economy in late 2015.


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