Latest Global Business News

U.S. Federal Reserve raises interest rates by quarter of point to 1.5 pct - third rise this year

 
Our top story this afternoon...
The U.S. central bank -- the Federal Reserve -- is raising its main interest rate by zero-point-two-five percent... in a further step toward reversing policies put in place after the global financial crisis.
 
The Fed said the U.S. was posting solid economic growth and has a labor market that continues to strengthen.
 
Park Soyun reports.  
 
  In a widely expected move,... the U.S. Federal Reserve has hiked interest rates by a quarter-of-a-percentage point to one-and-a-half percent - the third rise this year.
 
Wrapping up their two-day meeting in Washington on Wednesday,... Fed policymakers cited the "strong" U.S. jobs market and a sharp pick up in household and business spending for its decision,... despite inflation remaining below its two percent target.
 
(ENGLISH)
   "The U.S. economy is performing well. The growth, that we're seeing, it's not based on, for example, an unsustainable buildup of debt, as we had in the run up to the financial crisis.
 
I think, the risks are balanced, and there's less to lose sleep about now than has been true for quite some time."
 
us 3rd rate hike 2017
 
  Sticking with its previous forecast,... the Fed also said it still expects to raise rates three more times in 2018.
The majority of policymakers also agreed that U.S. rates will likely top two percent within the next twelve months.
 
  In addition,... Fed policymakers hiked their economic growth forecasts for this year and the next... to two-and-a-half percent.
The 2018 forecast far exceeds the Fed's previous forecast of two-point-one percent estimate published just three months ago.
 
President Trump, who is close to pushing through his one-and-a-half trillion dollar tax package, says it will be paid for by economic growth of around four percent,... a forecast Fed chair Janet Yellen said would be "challenging."
 
  The rate hike is Yellen's final major act as Fed chair as she will be replaced by Jerome Powell in February.
The Fed's rate increase means U.S. rates are now level with the benchmark rate in South Korea.
 

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