For the second time this year, the Fed hiked interest rates, in a widely expected move that reflects the central bank’s confidence in the U.S. economy.
After two-day meeting on Wednesday, the Federal Reserve’s Open Market Committee raised their benchmark interest rate by 25 basis points to a range of 1% to 1.25%.
The move was essentially a foregone conclusion and the market was pricing in a 99% chance of a rate hike, according to CME Group’s FedWatch tool.
The U.S. Federal Reserve decided to raise interest rates for the first time in 2016 and the second time in a decade. At the conclusion of its two-day Federal Open Market Committee (FOMC) December meeting, committee members voted unanimously to raise the U.S. central bank’s target range for the federal funds rate to 0.50 to 0.75 percent. The FOMC raised interest rates for the first time in nearly a decade last December.
Janet Yellen, the Fed chairwoman, said “growth is a touch stronger, unemployment is a shade lower” as she announced a 0.25% increase in the benchmark rate to 0.50-0.75%.
The Federal Reserve could raise U.S. interest rates "relatively soon" if economic data keeps pointing to an improving labor market and rising inflation, Fed Chair Janet Yellen said on Thursday in a clear hint the U.S. central bank could hike next month.
"Such an increase could well become appropriate relatively soon," Yellen said in prepared remarks that were her first public comments since the United States elected Republican Donald Trump to be the country’s next president.
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