Fed raises interest rates again

Fed raises interest rates again

This hike, which was widely expected, is the Fed's second of 2018, and the central bank signaled it is likely to do two more increases by the end of this year. That puts the Fed on track for four rate hikes total in 2018, something the Fed hasn't done since 2006.

The Fed move came after a two-day meeting where its members discussed the robust state of the U.S. economy and the potential impact of a trade war amid rising tension between the USA and its largest trading partners. The Committee expects that further gradual increases in the target range for the federal funds rate will be consistent with sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee's symmetric 2 percent objective over the medium term. The Fed has signaled that it will continue to gradually increase rates in response to higher inflation and strength in the USA labor market. The central bank is aiming to keep record low unemployment and a glut of federal spending from pushing inflation beyond the Fed's 2 percent target.

We are closing into the FOMC's June policy decision and as the clocks tick closer to the decision timing, following are the expectations as forecasted by the economists and researchers of 8 major banks along with some thoughts on the future course of Fed's action.

Trump declares oil prices 'too high', blames Opec
US ally Saudi Arabia remains OPEC's most powerful member - with enough production capacity to manipulate global supplies. Since early 2017, OPEC and other oil-producing countries have agreed to reduce supply in a bid to bolster oil prices.

The Fed's new projection for the pace of rate hikes shows four rate this year and three in 2019 - both unchanged from its previous forecast in March - and one in 2020, down from the two that had been projected previously. The step was needed, the Fed said, to be sure rates stay within the intended boundaries. Not since 1969 has the jobless rate been lower.

A gradual rise in inflation is coinciding with newfound economic strength.

Fed says raises interest on excess reserves rate to 1.95 pct from 1.75 pct. While Japan's central bank isn't expected to make any major policy shifts, anticipation is rising that the ECB may outline as early as this week plans to begin paring its bond-buying stimulus program as a prelude to ending them altogether.

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