Fed Raises Interest Rates Again With Plans For One More Bump Later This YearSeptember 28, 2018
The Federal Reserve said Wednesday it plans to raise short-term interest rates by another quarter-percentage point, and indicated additional increases are likely this year and through 2019. The money policy group believes rate bumps are needed to keep a strong economy humming along. The Federal Open Market Committee voted unanimously to raise the benchmark federal funds rate to a target range between 2% and 2.25%.
Fed Chairman Jerome Powell said, “Our economy is strong” and that “the overall growth outlook remains favorable.”
The Fed said factors contributing to the ongoing increases include a labor market that has continued to strengthen, and economic activity that has been rising at a strong rate. The Fed notes job gains have been strong, on average, in recent months, and the unemployment rate has stayed low. Additionally, household spending and business fixed investment have grown strongly.
Another factor the Fed considers is inflation. It says both overall inflation and inflation for items other than food and energy remain near 2% on a 12-month basis. Indicators of longer-term inflation expectations are little changed, on balance.