A+ A-

US Federal Reserve raises interest rates

WASHINGTON, Dec 13 (KUNA) -- The US Federal Reserve has decided to raise the interest rates to a target range of 1.25 to 1.5 percent.
This is the fifth increase in the interest rates since the Federal Reserve had cut the rates to about zero in the wake of the 2008 financial crisis.
Federal Open Market Committee (FOMC) said in a statement that it expects that "with gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace and labor market conditions will remain strong." It added that "inflation on a 12 month basis is expected to remain somewhat below two percent in the near term but to stabilize around the Committee's two percent objective over the medium term." "Near-term risks to the economic outlook appear roughly balanced, but the Committee is monitoring inflation developments closely," it affirmed.
It stressed that "in determining the timing and size of future adjustments to the target range for the federal funds rate, the Committee will assess realized and expected economic conditions relative to its objectives of maximum employment and two percent inflation." It noted that this assessment will take into account "a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments." The statement added that the Committee "will carefully monitor actual and expected inflation developments relative to its symmetric inflation goal.
The FOMC expects that economic conditions "will evolve in a manner that will warrant gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run," but that "the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data." (end) si.ibi