Fed Lifts Benchmark Interest Rate as Confidence in Economy Grows
At the end of its two-day policy review, the U.S. Federal Reserve took a step to tighten monetary policy for the second time in three months.
The 0.25 percentage point hike in the U.S. central bank's overnight interest rate was a move prompted by the steady economic growth, solid and consistent job gains and increasing confidence that inflation will move in accordance with the Fed's target, Fed Chair Janet Yellen said.
The move was also perceived by the market as a strong indication that the Fed is entering a new period where they are looking to return the monetary policy to a more normal condition. Yellen indicated that the shift is due to the growing confidence in the economy's progress, which has grown according to the Fed's expectations in the last few months.
The Fed also retained its outlook for two additional rate hikes this year and three more in the following year, in line with the number of rate increases they penciled in last year.
The FOMC also noted that inflation was nearing the target of 2% and that capex has somehow improved following months of weakness.
However, the Fed did not drop hints regarding its plans to accelerate the rate of monetary tightening.
News are provided byInstaForex.