Federal Reserve to raise rates
What to look out for - and what comes next
The Federal Reserve is set to lift the US benchmark interest rate from 1.5% to 1.75% today, following a meeting of its Federal Open Market Committee (FOMC).
According to CME Group there is a 95% chance the Fed will act, making it the sixth rate hike since late 2015, when it began shifting away from the near-zero rates it put in place during the 2007-2009 recession.
The rate rise is “all but certain”, says CNN Money, “the bigger question, however, is what will the Fed do next?”
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One question on investors’ lips will be whether Fed policymakers “either maintain their median forecast for three interest rate hikes this year or bump it up to four”, says USA Today, before claiming “economists are divided on which way Fed officials will go”.
With unemployment at 4.1% and continuing to fall, a recent $1.5tn tax cut and $200bn spending bill, along with an improved economic outlook, “the Fed may have to raise rates faster than it had planned to prevent the economy from overheating”, says CNN.
Analysts will also be looking for clues from new Fed boss Jerome Powell on what his future plans will be for the central bank - and economists expect him to use his first press conference to expand on his view that “headwinds have become tailwinds”, reports Market Watch.
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