本文发表在 rolia.net 枫下论坛The Federal Reserve on Wednesday raised interest rates for the fourth time this year.
The Fed increased the target range for its benchmark interest rate by 25 basis points to a new band of 2.25%-2.5%, putting the Fed funds rate at its highest level since the spring of 2008. All ten voting members of the FOMC voted in favor of Wednesday’s decision.
In its statement, the Fed pointed to a labor market that has “continued to strengthen” and economic activity that is “rising at a strong rate.” The Fed did note the slowdown in private investment seen over the last several months, saying “business fixed investment has moderated from its rapid pace earlier in the year.”
Along with its latest policy statement the Fed also released an updated set of economic projections, which shows a downgrade in the Fed’s forecast for interest rate hikes next year.
Fed signals fewer rate hikes for 2019
The Fed’s latest dot plot now shows the FOMC’s median forecast calling for two rate hikes in 2019, down from three in September. Six members of the FOMC, however, see three rate hikes next year as appropriate.
The longer-run neutral rate of interest that is expected to sustain full employment and price stability also fell slightly in December, with the median FOMC forecast now indicating the neutral rate is 2.8%, down from 3% in September.
In late November, Federal Reserve Chair Jerome Powell moved markets when he said the Fed funds rate was “just below” the range of estimates for the neutral rate of interest that allows the economy to sustain 2% inflation and full employment. That range of estimates has now come down, indicating the current cycle of interest rate increases is closer to its end than previously thought.更多精彩文章及讨论，请光临枫下论坛 rolia.net
The Fed increased the target range for its benchmark interest rate by 25 basis points to a new band of 2.25%-2.5%, putting the Fed funds rate at its highest level since the spring of 2008. All ten voting members of the FOMC voted in favor of Wednesday’s decision.
In its statement, the Fed pointed to a labor market that has “continued to strengthen” and economic activity that is “rising at a strong rate.” The Fed did note the slowdown in private investment seen over the last several months, saying “business fixed investment has moderated from its rapid pace earlier in the year.”
Along with its latest policy statement the Fed also released an updated set of economic projections, which shows a downgrade in the Fed’s forecast for interest rate hikes next year.
Fed signals fewer rate hikes for 2019
The Fed’s latest dot plot now shows the FOMC’s median forecast calling for two rate hikes in 2019, down from three in September. Six members of the FOMC, however, see three rate hikes next year as appropriate.
The longer-run neutral rate of interest that is expected to sustain full employment and price stability also fell slightly in December, with the median FOMC forecast now indicating the neutral rate is 2.8%, down from 3% in September.
In late November, Federal Reserve Chair Jerome Powell moved markets when he said the Fed funds rate was “just below” the range of estimates for the neutral rate of interest that allows the economy to sustain 2% inflation and full employment. That range of estimates has now come down, indicating the current cycle of interest rate increases is closer to its end than previously thought.更多精彩文章及讨论，请光临枫下论坛 rolia.net