Fed approves first rate hike in three years, pencils in more

Por Victoria Guida — POLITICO – TOP Stories

The Federal Reserve unanimously voted Wednesday to raise interest rates for the first time in three years and signaled it might hike again this year, a move that will test the delicate relationship between President Donald Trump and his new Fed chair, Kevin Warsh.

Central bankers are increasingly worried that inflation – worsened by soaring oil prices and an artificial intelligence investment boom – is not on a path back to their 2% target.

The decision comes less than seven weeks out from elections that will determine the balance of power in Congress, and as investors have already been driving long-term rates to nearly two-decade highs. The Fed’s benchmark rate is now set between 3.75% and 4%.

“Inflation remains elevated,” the central bank’s rate-setting committee said in a post-meeting statement. “Today’s policy action will support a timelier return to the Committee’s 2 percent goal.”

Fonte: POLITICO – TOP Stories