The US Central Bank, the Fed has raised its key interest rate, as experts expected. The target range for the Federal funds rate Federal Funds Rate increases by 0.25 points to 2.25 to 2.50 percent, said the Fed in Washington. To be able to this is the interest rate banks lend to each other overnight money. It is in view of the booming economy, already the fourth increase this year.
analysts had expected the interest rate increase this year, even if it had been up to the last residual doubts. It is the overall ninth increase since the start of interest rate tightening by the end of 2015. At that time, the interest rate had amounted to only 0.25 percent.
U.S. President Donald Trump had warned the Fed repeated before raising interest rates. He fears that higher interest rates could put an end to the economic boom in the United States. In a Tweet, Trump had increased the pressure on Fed Chairman Jerome Powell in front of the decision. Trump warned, to decide on the raising of interest rates. The Central banker should not make “another mistake”.
I hope the people over at the Fed wants to read yesterday’s Wall Street Journal Editorial before they make yet another mistake. So, dont let the market become any more illiquid than it already is. Stop with the 50 Bs. Feel the market, dont just go by meaningless numbers. Good luck!
— Donald J. Trump (@realDonaldTrump) 18. December 2018,
The Central Bank has on several occasions stressed their independence and insured that political pressure played no role in their decisions.
Originally, the interest rate per quarter should rise by 0.25 percentage points, and mid-2019 to three per cent. The brand is considered “neutral” territory, neither too high nor too low. Powell had recently stressed the Fed was nearing a level of interest rates, the economy slowed and neither pushed. Therefore, a cautious Approach was advisable.
Now the Fed has announced that the interest rate in 2019 to only twice a raise. In September, the Central Bank had signaled for three more increases.
Also for the economic growth, the Fed is a little less confident in The growth forecast for the current year was reduced slightly by 0.1 points to 3.0 percent. In the coming year, the Fed now expects the world’s largest economy to grow by 2.3 per cent. In the past, the expectation had amounted to 2.5 per cent.