Jerome Powell's Slightly More Hawkish Policy Stance

Jerome Powell's Slightly More Hawkish Policy Stance

Americans with credit-card debt are especially vulnerable to rising interest rates.

In his first press conference as new chairman, Jerome Powell said the Fed is trying to stake out the "middle ground: Raising rates enough to keep inflation at bay without causing harm to the economy".

However, he also acknowledged that central bankers now consider the prospects of a global trade war as a "more prominent risk" to the economic outlook.

In a statement issued by the central bank's Federal Open Market Committee, the unanimous decision was reached to "raise the target range for the federal funds rate to 1-1/2 to 1-3/4 percent". Despite the stronger growth, lower unemployment rate and higher interest rate forecast, the inflation projection was the same.

Fed officials also raised their forecast for 2017 GDP growth from 2.5 percent to 2.7 percent, while increasing the 2018 expectation from 2.1 percent to 2.4 percent. That was an increase of a quarter of a percentage point. Low-interest rates will help finance the out-of-control federal deficit.

The Fed's decision to raise the fed funds rate had an immediate impact on these rates Wednesday, sending them to 4.75% from 4.5%, mirroring the magnitude of the Fed's increase.

Sasso said with further interest rate hikes expected, controlling financing costs is going to be important for logistics companies.

Stocks rallied after the announcement.

Protests Continue Over Stephon Clark in Sacramento
Some Twitter users suggested that the second vehicle had sped up in order to hit a protester and then failed to stop. The sheriff added that the deputy may have been focused on the commotion to his left when he hit Cleveland.

Economists are wondering whether faster economic growth might cause the Fed to pick up the pace of its rate hikes.

Oddly, the Fed kept its inflation forecast for the next two years the same even though it sees a stronger economy and falling unemployment rate.

Earlier this month, Powell told lawmakers the economy was "strong" and tax cuts would add "meaningfully to growth".

If the Fed does stick with its new forecast for three rate increases this year and three in 2019, its key policy rate would stand at 3.4 per cent after five years of credit tightening. The step, the central bank's premiere paramount resolution underneath new Chairman Jerome H. Powell was exceptionally awaited as the U.S. economy continues to toughen and the stock markets abide near record highs.

A healthy job market and a steady if unspectacular economy have given the Fed the confidence to think the economy can withstand further increases within a still historically low range of borrowing rates.

The big change since then has been the arrival of a government tax cut plan to the tune of $1.5 trillion, plus a congressional deal to lift caps on federal discretionary spending for the next couple of years.

In its first policy meeting under new Fed chief Jerome Powell, the USA central bank indicated that inflation should finally move higher after years below its 2 percent target and that the economy had recently gained momentum.

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