Interest Rates hiked

Fed Hikes Interest Rates for First Time in 3 Years

Fed policymakers tighten policy in the face of elevated inflation and higher Treasury bond yields

Officials voted 12–0 to increase the benchmark federal funds rate—a key policy rate that influences borrowing costs for businesses and consumers—by a quarter point to a new target range of 3.75 percent to 4 percent.

This was the first rate hike since July 2023.

“Economic activity is expanding at a solid pace. While uncertainty remains elevated owing, in part, to geopolitical developments, domestic spending has been resilient,” the Fed said in a post-meeting statement.

“Productivity growth is strong, and capital investment is robust. Job gains have kept pace with the workforce, and the unemployment rate has changed little.”

In addition to the rate decision, the Fed released its Summary of Economic Projections, a quarterly outlook for policy and the economy. “This is certainly a positive for the market. It’s fair to assume that if the Fed had not acted today, it would have caused meaningful strain across markets.”

Read about it...