US Fed hikes key rates, signals additional increase in 2018

The United States Federal Reserve raised interest rates Wednesday by a quarter of a percentage point, a move that is set to trigger higher rates on credit cards, home equity lines and other kinds of borrowing.
 

In a statement released on Wednesday after their two-day meeting, US Federal Reserve signaled that they no no longer view the United States economy as needing a boost from monetary policy, and are beginning to worry more about the threat of inflation.
 

“Information received since the Federal Open Market Committee met in May indicates that the labor market has continued to strengthen and that economic activity has been rising at a solid rate. Job gains have been strong, on average, in recent months, and the unemployment rate has declined,” the US Federal Reserve said in the statement.

Wednesday's decision, which was widely expected, was the second Fed rate hike this year. The latest hike puts federal funds rate in a range between 1.75 and 2 percent. The Federal Reserve last raised rates in March, and signaled that it would likely raise rates again this year.

“The Committee expects that further gradual increases in the target range for the federal funds rate will be consistent with sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee's symmetric 2 percent objective over the medium term. Risks to the economic outlook appear roughly balanced,” the Fed added in the statement.