Fed boosts key rate
WASHINGTON — The Federal Reserve has raised its key interest rate for the third time in six months, providing its latest vote of confidence in a slow-growing but durable economy. The Fed also announced plans to start gradually paring its bond holdings later this year, which could cause long-term rates to rise.
The increase in the Fed’s short-term rate by a quarterto a still-lowrange of 1 percent to 1.25 percent could lead to higher borrowing costs for consumers and businesses and slightly better returns for savers. The Fed foresees one additional rate hike this year but gave no hint of when that might occur. qualified for financial aid available to low-income Americans to reduce their out-of-pocket costs.
“Thefighthere is tomake sure thatwe are able to protect and preserve affordable coverage for those people,” Shaffer said.
Florida Blue hasn’t yet filed rates or other details for 2018 coverage the company will sell on the ACA exchange at healthcare.gov.
Plan rates are due to the state’s Office of Insurance Regulation on June 21 and
The overarching message the Fed sent Wednesday was an upbeat one: It believes theU.S. economy is on firm footing as it enters its ninth year of recovery from the Great Recession, with little risk of backsliding. Though the economy is growing sluggishly and inflation remains chronically below the Fed’s 2 percent target, it foresees improvement in both measures over time.
And the most important pillar of the economy — the job market — remains solid if slowing, with employment at a 16-year-low of 4.3 percent — even below the level theFedassociates with full employment.
The Fed’s decision to raise rates, announced in a statement after its latest policy meeting, was approved 8-1, with Neel Kashkari, head of the Fed’s Minneapolis regional bank, dissenting in favor of holding rates unchanged.
The announcement that are expected to become public after they are locked in August.
Shafferwouldn’t say how much premiums will rise in 2018 compared to the current year. But she said Florida Blue announced its intention to stay in the market in order to reassure consumers.
“There’s a fair amount of uncertainty in the marketplace,” she said, “and the only piece of that whole message thatwe can control in any way is the reassurance so that individuals understand what our commitment is to the 67 counties.” the Fed plans to begin paring its balance sheet later this year — “provided that the economy evolves broadly as anticipated” — involves its enormous portfolio of Treasury and mortgage bonds.
The Fed began buying the bonds after the Great Recession to try to depress long-term loan rates. That effort resulted in a five-fold increase in its portfolio to $4.5 trillion.
On Wednesday, the Fed said it would eventually allow a small amount of bonds to mature without being replaced— anamount that would gradually rise as markets adjusted to the process.
This process could put upward pressure on longterm borrowing rates.
The Fed also issued updated economic forecasts that showed it foresees one additional rate increase this year to followWednesday’s increase and an earlier rate hike inMarch.
Many insurers, including Aetna, Humana and United Health, have largely retreated from the insurance exchanges created by the health law known as Obamacare after losing money.
Florida Blue is making money, Shaffer said, calling its profit margin “conservatively positive.”
Also Tuesday, health insurer Centene announced plans to begin offering ACA coverage on exchanges in Missouri, Kansas and Nevada — and to broaden its presence in Florida, though the company did not specify where it will expand.