Fed raises key interest rate and sees possible acceleration in hikes

Fed raises key interest rate and sees possible acceleration in hikes

Fed raises key interest rate and sees possible acceleration in hikes

The Federal Reserve raised a key interest rate another quarter-point on Wednesday.

Fed Chairman Jerome Powell will hold a press conference at the conclusion of the two-day June meeting.

Announcing the decision to increase its target for the fed-funds rate to a range of 1.75% to 2%, the Fed described the United States jobs market as "strong" and said economic activity had been rising at "a solid rate".

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.

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Following the Fed's rate decision, the FOMC releases its statement regarding monetary policy. The Fed expects inflation higher than 2% over the next two years, according to its latest projections.

The decision reflected an economy that's getting even stronger. Unemployment, now at an 18-year low of 3.8 percent, would drop to 3.6 percent by year's end and to 3.5 percent in 2019 and 2020 - levels not seen in 49 years.

The unemployment rate is 3.8%, the lowest since 2000 and tied for the lowest reading since 1969.

A gradual rise in inflation is coinciding with newfound economic strength.

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The Fed aims to achieve its mandates of maximizing employment and stabilizing prices by lowering rates to spur growth during times of economic weakness and raising rates to slow growth if the economy threatens to overheat. It's the second rate hike under Powell, a Republican appointed to lead the Fed by President TrumpDonald John TrumpWhat you need to know about Tuesday's elections Danny Tarkanian wins Nevada GOP congressional primary Laxalt, Sisolak to face off in Nevada governor's race MORE.

Fed says raises interest on excess reserves rate to 1.95 pct from 1.75 pct.

In a technical move, the central bank also chose to set the interest rate it pays banks on excess reserves - its chief tool for moderating short-term interest rates - at just below the upper level of its target range.

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