Article by ForexTime
The Federal Reserve concluded its December monetary policy meeting on Wednesday and as was widely expected, it raised short-term interest rates. This was the first rate hike in nearly a decade, calling an end to the near-zero borrowing costs that have prevailed since the US was struck by the worst financial crash in modern times.
In a landmark step, the US central bank announced a quarter-point increase in the target range for the federal funds rate to 0.25-0.5 per cent, lifting it from the historic lows it has occupied since December 2008, when the US was mired in an economic crisis that would ultimately drive unemployment to 10 per cent.
Policymakers expect only “gradual” future increases in the federal funds rate after today’s move, the Fed said in a statement. It added that given the current shortfall in inflation compared with its 2 per cent target, it would “carefully monitor actual and expected progress” towards its inflation goal.
It said it expected to maintain the current large size of its balance sheet until normalisation of interest rates was “well under way”.
Article by ForexTime
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