WASHINGTON — The Federal Reserve has raised a key interest rate for the third time this year in response to a strong US economy and signaled that it expects to maintain a pace of gradual rate hikes.
The Fed on Wednesday lifted its short-term rate — a benchmark for many consumer and business loans — by a quarter-point to a range of 2 percent to 2.25 percent. It was the eighth hike since late 2015.
The central bank stuck with its previous forecast for a fourth rate increase before year’s end and for three more hikes in 2019.
The Fed dropped phrasing it had used for years that characterized its rate policy as “accommodative” by favoring low rates. In dropping that language, the central bank may be signaling its resolve to keep raising rates.
Many analysts think the economy could weaken next year, in part from the effects of the trade conflicts President Donald Trump has pursued with China, Canada, Europe and other trading partners. The tariffs and counter-tariffs that have been imposed on imports and exports are having the effect of raising prices for some goods and supplies and potentially slowing growth.
Source:New York Post