Gold Silver Reports (GSR) – The Federal Reserve raised interest rates by a quarter point on Wednesday, its first rate hike this year, in a decision that was widely anticipated by markets.
The Federal Open Market Committee increased the overnight funds rate to a range of 1.5% to 1.75% in its first meeting with newly-installed Chairman Jerome Powell at the helm. Futures traders had seen an around 90% chance of a rate increase ahead of the meeting, according to Investing.com’s Fed Rate Monitor Tool.
The Fed projected three rate hikes this year at its December meeting, but investors took an upbeat assessment of the U.S. economy by Powell late last month as an indication that a fourth rate hike could be on the cards. Investors will be closely watching for indications from the Fed in its statement today that market conditions can support four rate hikes.
Recent tax cuts and government spending increases along with economic data pointing to continued strengthening in the labor market have raised questions over whether the Fed will need to raise rates more aggressively in order to allow the economy to keep expanding without overheating.
Read More : Powell to Ponder Hawkish Tone in FOMC Debut
In his first congressional testimony as Fed chairman, Powell said the economy had been stronger this year than he expected in December and vowed to forge ahead with gradual rate increases to avoid an “overheated economy”. – Neal Bhai Reports (NBR)
