Fed lifts rates for fourth time, but sees fewer hikes
WASHINGTON — The Federal Reserve raised its key interest rate as the holiday break approached for the fourth time this year to reflect the U.S. economy’s continued strength but signaled that it expects to slow its rate hikes next year.
Despite the forecast for fewer hikes, investors sent stocks plunging once Chairman Jerome Powell began a news conference, apparently disappointed that Powell didn’t go further to signal a slowdown in rate increases.
Last Wednesday’s quarterpoint increase, to a range of 2.25 percent to 2.5 percent, lifted the Fed’s benchmark rate to its highest point since 2008. It will mean higher borrowing costs for many consumers and businesses.
The Fed’s move came despite President Donald Trump’s attacks in recent weeks on its rate hikes and on Powell personally. The president has complained that the moves are threatening the economy.
The Federal Reserve is raising its key interest rate for the fourth time this year to reflect the U.S. economy’s continued strength but signaling that it expects to slow hikes next year.