|
|
US Fed raises interest rates for second time this year
|
|
|
|
Top Stories |
|
|
|
|
IANS | 14 Jun, 2018
The US Federal Reserve has raised short-term interest rates by a quarter
of a percentage point, its second rate hike this year and the seventh
since late 2015.
"In view of realized and expected labor market
conditions and inflation, the (Federal Open Market) Committee decided to
raise the target range for the federal funds rate to 1-3/4 to 2 per
cent," the central bank said in a statement on Wednesday after
concluding a two-day meeting.
The Fed said the US labour market
has "continued to strengthen" and economic activity has been "rising at a
solid rate", with household spending picking up and business fixed
investment growing strongly, Xinhua reported.
The Fed also said
both overall inflation and so-called core inflation for items other than
food and energy "have moved close to 2 per cent", suggesting that Fed
officials are getting increasingly confident about inflation to reach
its 2-per cent target.
In its latest forecast released on
Wednesday, the central bank expected the U.S. economy to grow at 2.8 per
cent this year, a little higher than 2.7 per cent estimated in March.
The U.S. unemployment rate is expected to drop to 3.6 per cent by the
end of the year, lower than 3.8 per cent previously estimated.
Solid
economic growth and tumbling unemployment are likely to keep the Fed on
a steady path toward tightening monetary policy to prevent the US
economy from overheating, analysts said.
Fed officials
envisioned four rate hikes this year, up from three estimated in March,
according to the median forecast for the federal funds rate. Fed
policymakers also penciled three rate increases in 2019 and one in 2020.
Fed Chairman Jerome Powell believed that a gradual pace of
interest rate hikes remains the appropriate path for the central bank to
sustain economic expansion.
"We continued to believe that a
gradual approach for increasing the federal funds rate will best promote
a sustained expansion of economic activity, strong labour market
conditions, and inflation near our symmetric two per cent goal," Powell
said Wednesday at a press conference.
"We are aware that raising
rates too slowly might raise the risk that monetary policy would need to
tighten abruptly down the road in response to an unexpectedly sharp
increase in inflation or financial excesses, jeopardising the economic
expansion," he argued, adding the US economy could weaken and inflation
could continue to run persistently below the 2-per cent target if the
central bank raises interest rates too rapidly.
Wednesday's
announcement marked the Fed's seventh rate hike of this tightening cycle
beginning December 2015 and the second move under Powell, who took the
helm of the central bank in February.
About 84 per cent of
economists polled by The Wall Street Journal earlier this month
estimated that the Fed would raise interest rates again at its September
policy meeting.
|
|
|
|
|
|
|
|
|
|
|
|
|
Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
|
66.20
|
64.50 |
UK Pound
|
87.50
|
84.65 |
Euro
|
78.25
|
75.65 |
Japanese
Yen |
58.85 |
56.85 |
As on 13 Aug, 2022 |
|
|
Daily Poll |
|
|
PM Modi's recent US visit to redefine India-US bilateral relations |
|
|
|
|
|
Commented Stories |
|
|
|
|
|
|
|
|