Federal Reserve hikes rates for third time this year

The Federal Reserve raised interest rates for the third time this year.The decision, which was expect...

Posted: Sep 27, 2018 9:01 AM
Updated: Sep 27, 2018 9:01 AM

The Federal Reserve raised interest rates for the third time this year.

The decision, which was expected, is a sign of increased confidence in the US economy. Unemployment is low, economic growth is strong, and inflation is relatively stable.

Policymakers under Chairman Jerome Powell unanimously agreed to raise the federal funds rate a quarter percentage point, to a range of 2% to 2.25%. The rate helps determine rates for mortgages, credit cards and other consumer borrowing.

"Our economy is strong," Powell said at a press conference on Wednesday. "These rates remain low, and my colleagues and I believe that this gradual returning to normal is helping to sustain this strong economy."

Central bankers raised expectations for a fourth rate hike in December, with a majority now in favor of such a move. In June, policymakers were split on whether the Fed should raise rates four times this year or three.

Looking ahead to 2019, Fed officials expect at least three rate hikes will be necessary, and one more in 2020.

"The Fed shows no signs of taking (a) breath in rate hikes," Robert Frick, corporate economist with Navy Federal Credit Union, wrote in a research note.

The central bank also stripped the word "accommodative" from its description of monetary policy. That may be a signal that the Fed believes interest rates are finally at a neutral level, meaning they neither stimulate nor hinder the economy.

The Fed kept rates near record lows for years to encourage growth after the financial crisis. But it has been gradually raising them over the past three years.

Daragh Maher, the head of FX strategy for the United States at HSBC, said the change in language reflects "the reality that policy can no longer be usefully described as loose."

The Fed wants to raise interest rates steadily to keep the economy from overheating, but avoid raising rates so quickly that it brings on could help start a recession.

For now, the chairman has maintained that gradual interest-rate increases are the best way to balance those risks.

Powell said that central bankers have heard a "rising chorus" of concerns from businesses about the US-China trade war. But he said that the economic impact of US tariffs is "still relatively small."

He warned that tariffs could lead to higher consumer prices, but said policymakers don't see that in the numbers just yet.

Walmart, Gap, Coca-Cola, General Motors, Macy's and other companies have said tariffs could force them to raise prices on everyday consumer goods.

The Fed raised its expectation for economic growth this year to 3.1% from 2.8%, reflecting strength in the second and current quarters.

But for 2019, Fed officials expect growth to slow to 2.5% amid worries about the growing trade rift between the United States and China. The revised estimate is slightly higher than what policy makers expected last quarter, at 2.4%.

The FOMC also gave its first look of what it expects for the economy in 2021. Policy makers anticipate economic growth will shrink to 1.8% in that year.

Investors and former Fed Chairman Ben Bernanke have warned of an economic slowdown in 2020.

Indiana Coronavirus Cases

Data is updated nightly.

Cases: 725353

Reported Deaths: 13373
CountyCasesDeaths
Marion990831737
Lake53265963
Allen40302675
Hamilton35392408
St. Joseph35350550
Elkhart28304438
Tippecanoe22315217
Vanderburgh22252396
Porter18596306
Johnson17856376
Hendricks17121313
Clark12908191
Madison12549339
Vigo12400244
Monroe11827168
LaPorte11736210
Delaware10595185
Howard9837215
Kosciusko9358117
Hancock8225140
Bartholomew8038155
Warrick7761155
Floyd7636177
Wayne7007199
Grant7003174
Boone6660101
Morgan6543139
Dubois6143117
Marshall5973111
Dearborn577977
Cass5777105
Henry5675102
Noble556583
Jackson500172
Shelby488596
Lawrence4482120
Gibson434191
Harrison433071
Clinton426653
DeKalb424184
Montgomery423188
Whitley393739
Huntington386980
Steuben381857
Miami379766
Knox371190
Jasper362147
Putnam358260
Wabash352578
Adams340554
Ripley338670
Jefferson328881
White312554
Daviess295499
Wells290481
Decatur283392
Fayette278462
Greene276285
Posey270733
Scott264553
LaGrange264270
Clay258645
Randolph239781
Washington239332
Spencer230831
Jennings229048
Starke213852
Fountain211846
Sullivan210942
Owen196356
Fulton194240
Jay190930
Carroll187820
Perry182537
Orange182154
Rush172725
Vermillion167843
Franklin167235
Tipton161945
Parke145616
Blackford134332
Pike132834
Pulaski116045
Newton107034
Brown101441
Crawford99114
Benton98114
Martin87515
Warren80915
Switzerland7828
Union70610
Ohio56211
Unassigned0413

Ohio Coronavirus Cases

Data is updated nightly.

Cases: 1078734

Reported Deaths: 19344
CountyCasesDeaths
Franklin1253471392
Cuyahoga1113202107
Hamilton797471200
Montgomery512091012
Summit46916933
Lucas41890782
Butler38250580
Stark32150907
Lorain24874480
Warren24236297
Mahoning21439586
Lake20548368
Clermont19719238
Delaware18478131
Licking16384210
Fairfield16116199
Trumbull15974466
Medina15213262
Greene15013244
Clark13942297
Wood13038188
Portage12792201
Allen11590231
Richland11300198
Miami10656215
Muskingum8787132
Wayne8760210
Columbiana8743229
Pickaway8540121
Marion8502135
Tuscarawas8461243
Erie7840154
Hancock6884126
Ross6830152
Ashtabula6765169
Geauga6664148
Scioto6393101
Belmont5837167
Union569647
Lawrence5542102
Jefferson5487151
Huron5419119
Darke5342122
Sandusky5322120
Seneca5258121
Athens518158
Washington5138109
Auglaize487884
Mercer479785
Shelby467693
Knox4477110
Madison435061
Putnam4263100
Ashland420989
Fulton420469
Defiance417797
Crawford3960106
Brown392457
Logan380976
Preble378498
Clinton369961
Ottawa366179
Highland353161
Williams337275
Champaign329658
Guernsey315353
Jackson311851
Perry294550
Morrow283739
Fayette281049
Hardin270164
Henry267966
Coshocton263958
Holmes2591101
Van Wert242663
Pike237333
Adams236552
Gallia235048
Wyandot230654
Hocking214862
Carroll191047
Paulding171740
Meigs144339
Noble133437
Monroe131242
Morgan108323
Harrison107437
Vinton82115
Unassigned02
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