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March 15, 2017
FOMC OKs 25 bps rate increase; more expected this year
The Federal Open Market Committee, the Federal Reserve's monetary policy setting arm, said after the close of a two-day meeting Wednesday that it is raising the federal funds target rate a quarter-point to a range of 0.75 to 1 percent.
"As anticipated, the FOMC went forward with the first rate hike of 2017," said NAFCU Chief Economist and Director of Research Curt Long. "Given that inflation is rising and approaching the Fed's 2 percent target, Fed officials had little choice but to raise rates."
"Chair Janet Yellen has indicated that more rate hikes are on the way later this year," Long added.
NAFCU also delivered a NAFCU Macro Data Flash report to members yesterday with more information on the FOMC's actions. Long noted in the report that the FOMC stressed that it "expects that economic conditions will evolve in a manner that will warrant gradual increases in the federal funds rate."
The committee's revised projections are three quarter-point rate hikes in 2017 (including the one announced yesterday), three in 2018 and three to four in 2019. The FOMC will meet again May 2-3.
The FOMC last raised the federal funds target rate to a range of 0.5 to 0.75 percent last December.
"As anticipated, the FOMC went forward with the first rate hike of 2017," said NAFCU Chief Economist and Director of Research Curt Long. "Given that inflation is rising and approaching the Fed's 2 percent target, Fed officials had little choice but to raise rates."
"Chair Janet Yellen has indicated that more rate hikes are on the way later this year," Long added.
NAFCU also delivered a NAFCU Macro Data Flash report to members yesterday with more information on the FOMC's actions. Long noted in the report that the FOMC stressed that it "expects that economic conditions will evolve in a manner that will warrant gradual increases in the federal funds rate."
The committee's revised projections are three quarter-point rate hikes in 2017 (including the one announced yesterday), three in 2018 and three to four in 2019. The FOMC will meet again May 2-3.
The FOMC last raised the federal funds target rate to a range of 0.5 to 0.75 percent last December.
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