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.”


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