FOREX TradingCharts.com

Financial News: Fed Hikes Interest Rate, Will Reduce Balance Sheet

Fed Hikes Interest Rate, Will Reduce Balance Sheet -- Update

06/14/2017 - 14:17:00 (RTTNews)

(RTTNews) - The Federal Reserve on Wednesday raised its benchmark interest rate for the third time in three months despite signs the U.S. economy has cooled off in 2017.

The Federal Open Market Commitee voted to raise fed funds to between 1% and 1.25% and will start "gradual" shrinking of its $4.5 trillion balance sheet "this year."

The Fed, tasked with promoting full employment and healthy inflation, was forced to deal with an unusual dilemma -- the unemployment rate has dropped to its lowest in 16 years, but inflation has weakened below the Fed's 2 percent target rate.

Their so-called 'dot plot' shows one more rate hike in 2017 and three more in 2018, but the Fed's accompanying statement offered little indication they plan to raise interest rates again this summer.

Policy makers say they are "monitoring developments closely," meaning they are likely wait for comfirmation that recent economic weakness is "transitory."

"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 moderately so far this year," the Fed said.

However, in a nod to May's lackluster jobs report, the statement noted "Job gains have moderated but have been solid, on average, since the beginning of the year." Also, U.S. retail sales in May were the weakest in 16 months, data showed this morning.

Meanwhile, the rate of inflation over the past 12 months has slowed to 1.9% in May from 2.7% just in February.

Still, the Fed expects to begin implementing a balance sheet normalization program this year, provided that the economy evolves broadly as anticipated.

The vote to hike interest rates was 9-1. Voting against the action was Minneapolis President Neel Kashkari, who preferred at this meeting to maintain the existing target range for the federal funds rate.

For comments and feedback: contact editorial@rttnews.com

Copyright(c) 2017 RTTNews.com. All Rights Reserved

Market News provided by RTTNews

RECENT INTERNATIONAL FINANCIAL NEWS


Bank Of America Lowers U.S. GDP Outlook (04 hr(s), 48 min(s), 26 sec(s) ago)
(RTTNews) - Bank of America Merrill Lynch has downgraded its outlook on U.S. gross domestic produc ...Full Story»

Swedish Unemployment Rate Set To Drift Lower This Year (08 hr(s), 11 min(s), 26 sec(s) ago)
(RTTNews) - Sweden's unemployment rate is likely to ease in the coming months of this year, wh ...Full Story»

Eurozone Consumer Confidence Unlikely To Rise Much Further (08 hr(s), 45 min(s), 26 sec(s) ago)
(RTTNews) - Eurozone consumer confidence is unlikely to rise much further in the next year, despit ...Full Story»

Belgium Business Confidence Weakens For Second Month (09 hr(s), 15 min(s), 26 sec(s) ago)
(RTTNews) - Belgium's business confidence deteriorated for a second consecutive day in June am ...Full Story»

BRAZIL: Central Bank Points Again To Slower Pace Of Interest Rate Cuts (09 hr(s), 55 min(s), 26 sec(s) ago)
(RTTNews) - The Brazilian central bank stated again, this time in its quarterly inflation report, ...Full Story»

MEXICO: Central Bank Increases Key Interest Rate To 7% (10 hr(s), 02 min(s), 26 sec(s) ago)
(RTTNews) - Mexico's central bank (Banxico) decided to increase its benchmark interest rate by ...Full Story»

Eurozone Private Sector Growth Moderates In June (10 hr(s), 12 min(s), 26 sec(s) ago)
(RTTNews) - Eurozone private sector growth moderated in June from a six-year high due to a slowdow ...Full Story»

Iceland Wage Growth Accelerates In May (10 hr(s), 25 min(s), 26 sec(s) ago)
(RTTNews) - Iceland's wage growth accelerated for the first time in thirteen months in May, fi ...Full Story»

Search

INTERNATIONAL FINANCIAL NEWS

Bank Of America Lowers U.S. GDP Outlook

06/23/2017 - 13:48 PM (RTTNews)
(RTTNews) - Bank of America Merrill Lynch has downgraded its outlook on U.S. gross domestic produc ...Full Story>>

Swedish Unemployment Rate Set To Drift Lower This Year

06/23/2017 - 10:25 AM (RTTNews)
(RTTNews) - Sweden's unemployment rate is likely to ease in the coming months of this year, wh ...Full Story>>

Eurozone Consumer Confidence Unlikely To Rise Much Further

06/23/2017 - 09:51 AM (RTTNews)
(RTTNews) - Eurozone consumer confidence is unlikely to rise much further in the next year, despit ...Full Story>>

Belgium Business Confidence Weakens For Second Month

06/23/2017 - 09:21 AM (RTTNews)
(RTTNews) - Belgium's business confidence deteriorated for a second consecutive day in June am ...Full Story>>

BRAZIL: Central Bank Points Again To Slower Pace Of Interest Rate Cuts

06/23/2017 - 08:41 AM (RTTNews)
(RTTNews) - The Brazilian central bank stated again, this time in its quarterly inflation report, ...Full Story>>

Binary Options Articles Courtesy of NADEX

These pages, and all content ©TradingCharts.com Inc and other copyright holders. Permission is not granted to redistribute charts, data, news or other information found on this site, in any manner. Although it is believed that information provided is accurate, TradingCharts will not accept liability for any loss or damage that may arise from use of the content, inability to access the website, or delay or failure of receive of any information provided through this site.