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Fed Raises Interest Rates in Third Hike This Year
The Federal Reserve raised interest rates by a quarter point on Wednesday, citing a faster pace of economic growth, strong labor market and inflation close to target.
The Federal Open Market Committee increased the overnight funds rate to a range of 2.00% to 2.25%..
In a somewhat hawkish tilt, the Fed halted its use of "accommodative" to describe its stance on monetary policy.
"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 statement said. "In view of realized and expected labor market conditions and inflation, the Committee decided to raise the target range for the federal funds rate to 2 to 2-1/4 percent."
Futures traders had seen an around 100% chance of a rate increase ahead of the meeting, according to Investing.com’s Fed Rate Monitor Tool.
The U.S. central bank last raised rates in June, also by a quarter point, and policymakers have projected a further rate hike to follow this year following strong economic growth, low unemployment and steady inflation.
The minutes from the Fed’s July policy meeting showed policymakers expected the economy to expand at an above-trend pace and inflation to remain near the central bank's 2% objective.
The most recent reading of the core PCE price index, the Fed's preferred measure of inflation, came in at 2%, though the central bank has signalled that it was somewhat comfortable with inflation running above target.
Ahead of the meeting, analysts had expected the Fed would become more flexible with its gradual pace of rate hikes in a bid to move closer to a neutral rate, aimed to neither expand nor contract the economy.
Investors will be closely watching for any indications from Fed Chairman Jerome Powell, in his post-policy-meeting press conference, that market conditions can support a faster pace of rate hikes.
Powell is likely to tout "growing upside risks" to the economic backdrop and downplay the risk trade tensions pose to growth, RBC said.
The Federal Reserve raised interest rates by a quarter point on Wednesday, citing a faster pace of economic growth, strong labor market and inflation close to target.
The Federal Open Market Committee increased the overnight funds rate to a range of 2.00% to 2.25%..
In a somewhat hawkish tilt, the Fed halted its use of "accommodative" to describe its stance on monetary policy.
"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 statement said. "In view of realized and expected labor market conditions and inflation, the Committee decided to raise the target range for the federal funds rate to 2 to 2-1/4 percent."
Futures traders had seen an around 100% chance of a rate increase ahead of the meeting, according to Investing.com’s Fed Rate Monitor Tool.
The U.S. central bank last raised rates in June, also by a quarter point, and policymakers have projected a further rate hike to follow this year following strong economic growth, low unemployment and steady inflation.
The minutes from the Fed’s July policy meeting showed policymakers expected the economy to expand at an above-trend pace and inflation to remain near the central bank's 2% objective.
The most recent reading of the core PCE price index, the Fed's preferred measure of inflation, came in at 2%, though the central bank has signalled that it was somewhat comfortable with inflation running above target.
Ahead of the meeting, analysts had expected the Fed would become more flexible with its gradual pace of rate hikes in a bid to move closer to a neutral rate, aimed to neither expand nor contract the economy.
Investors will be closely watching for any indications from Fed Chairman Jerome Powell, in his post-policy-meeting press conference, that market conditions can support a faster pace of rate hikes.
Powell is likely to tout "growing upside risks" to the economic backdrop and downplay the risk trade tensions pose to growth, RBC said.
This is one of the high probability counts on Banknifty. we have red wave c on the downside might be due ,before the breakout or red wave c might have ended at the red wave A markedand it might give breakout straightaway. I am biased towards former. we might have surprising rally in Banknifty today second half but if it breaks the low of blue wave (c) then things will be little late as it might take my previous count
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