• News
  • Money

Wall Street loses ground as Fed signals two more hikes this year

Wall Street loses ground as Fed signals two more hikes this year

The Federal Reserve on Wednesday raised its benchmark interest rate a quarter percentage point, marking the seventh such move since the end of 2015.

The Federal Reserve raised interest rates on Wednesday, a move that was widely expected but still marked a milestone in the USA central bank's shift from policies used to battle the 2007-2009 financial crisis and recession.

Besides raising its projection for rate increases this year from three to four, the Fed removed a key sentence from the previous statement that had been viewed as foreseeing a need to keep rates low for an extended period.

And a majority of policy makers said they now expect a total of four interest rate increases this year.

Projections released after the Fed's two-day meeting in Washington show policymakers expect the U.S. economy will grow 2.8% this year, while unemployment falls to 3.6%.

According to CNBC, the Reserve released new data this week showing the GDP forecast rose to almost 3%, up from the previous predictions of 2.7%.

Estimates of longer-run interest rates were unchanged and seen reaching as high as 3.4 percent in 2020 before dropping to 2.9 percent in the longer run.

The Fed has long aimed for 2 percent inflation, a level policymakers think is key to a healthy economy.

Policy makers said in a one-page statement that the labor market "has continued to strengthen" and than economic activity "has been rising at a solid rate". It also forecast an even lower unemployment rate of 3.5% for 2019 and 2020.

Though rates are now roughly positive on an inflation-adjusted basis, the Fed still described its monetary policy as "accommodative", with gradual rate increases likely warranted as a sturdy economy enters a 10th straight year of growth.

U.S. unemployment dropped to 3.8% in May, its lowest level since April 2000 and one of the lowest levels since the second world war.

The Fed's latest projections show unemployment falling to 3.6 percent in 2018. It then raised rates once in 2015, once in 2016, three times in 2017 and now twice this year.

The 3.8-percent jobless rate is close to the lowest level ever seen in the U.S. There are more job openings than workers seeking employment in the country for the first time in recorded history, and recent inflation data shows prices inching through the Fed's ideal threshold. But if it miscalculates and overdoes the credit tightening, it can trigger a recession.

Powell faces a tricky balancing act as the Fed attempts to bring interest rates toward historical averages. All those countries have vowed to retaliate against any US tariffs with their own penalties against USA goods.

A global trade war would risk cutting into USA economic growth by depressing American export sales and raising inflation by making consumers and businesses pay more for imports.

Leave Your Comment

Leave Your Comment


Latest News

  • Jada Pinkett Smith Opens Up About Suicidal Thoughts

    Jada Pinkett Smith Opens Up About Suicidal Thoughts

    And for Jada , this message was for her, too, because she once felt the same despair that the late Bourdain and Spade died from. One day I was like, enough, I was having like five orgasms a day. 'I was as protective of Jaden as I was of you.
    Raccoon that captivated internet is rescued safely in St. Paul

    Raccoon that captivated internet is rescued safely in St. Paul

    The racoon eventually stopped for a nap on a window ledge on the 22nd floor, Twin Cities Pioneer Press reported . The raccoon then steadily ascended UBS Tower, taking the time to groom itself and lay down along the way.
    Mo Salah provides boost for Egyptians ahead of their World Cup opener

    Mo Salah provides boost for Egyptians ahead of their World Cup opener

    He took part in the team training session on Wednesday but did not engage in any pieces of training that involves the ball. Mohamed Salah looks to be on course to make his return for Egypt in time for the beginning of the World Cup .
  • Cute Charlotte spots Queen waving so she waves just like Gan-Gan

    Cute Charlotte spots Queen waving so she waves just like Gan-Gan

    Okay, okay, slight exaggeration but it is refreshing to see the royal family having a day out just like anyone else. Charlotte and George made the most of their day out.
    Toyota Plans Billion-Dollar Investment in Ride-Hailing Startup Grab

    Toyota Plans Billion-Dollar Investment in Ride-Hailing Startup Grab

    Japan's top automaker Toyota Motor Corp is investing US$1 billion in Grab, the leading ride-hailing company in Southeast Asia. Grab said it logs six million rides a day via apps downloaded onto over 100 million mobile devices.
    Google Home can now juggle three queries at once

    Google Home can now juggle three queries at once

    With there being a number of digital assistants to choose from, each is now focusing on becoming smarter than the competition. That lead to unnatural sentences like "turn on the lights in the living room and turn on the lights in the kitchen".
  • Trump declares oil prices too high, blames OPEC

    Earlier this month, Bloomberg reported that the Trump administration asked OPEC and Russian Federation to boost oil output. The IEA report comes a day after OPEC warned of "considerable uncertainty as to world oil demand".
    Kim Agrees to Send Remains of US Soldiers Home

    Kim Agrees to Send Remains of US Soldiers Home

    Kim, Moon's spokesman, says Seoul is still trying to figure out the exact meaning and intent of Trump's comments. Dandong is a little more than 500 miles from Beijing , but sits extremely close to the elusive North Korea.
    Half of Americans approve of Trump's handling of North Korea - Reuters/Ipsos poll

    Half of Americans approve of Trump's handling of North Korea - Reuters/Ipsos poll

    On Wednesday morning, he took to Twitter to claim there was "no longer" a nuclear threat posed by the North Korean regime. FILE PHOTO: North Korea's leader Kim Jong Un listens to U.S.
  • Reports indicate the next Xbox will launch in 2020

    Reports indicate the next Xbox will launch in 2020

    He said that Microsoft was recommitting and harnessing the full breath of the company to deliver on the future of play. Microsoft, for example, has gone this route with the Xbox One and its backwards compatibility with the Xbox 360.
    USA, Canada and Mexico to host 2026 FIFA World Cup

    USA, Canada and Mexico to host 2026 FIFA World Cup

    They warned "the amount of new infrastructure required for the Morocco 2026 bid to become reality can not be overstated". President Donald Trump welcomed the news, tweeting: "The U.S., together with Mexico and Canada, just got the World Cup".
    Cecchinato vows to prove French Open semi-final outing was no fluke

    Cecchinato vows to prove French Open semi-final outing was no fluke

    The world number one goes in search of Roland Garros title number 11 against Dominic Thiem of Austria on Sunday. He hit a forehand long for 0-30 and then hit another forehand into the net to gift Nadal three set points.
  • First Warning Forecast: Strong To Severe Storms Tonight

    First Warning Forecast: Strong To Severe Storms Tonight

    NOAA's Storm Prediction Center has placed that part of the state under a marginal risk of severe weather today . Tomorrow will hold the chance for storms in all day due to model differences in the timing of rain.
    Handshakes instead of sledges to kick off series between Australia and England

    Handshakes instead of sledges to kick off series between Australia and England

    We've spoken about our values and how we want to be perceived by the Australian public and the cricket public in general. But as well as trying to mould a new-look side, Paine must also cement his own place.
    Valve And Perfect World Are Bringing Steam To China

    Valve And Perfect World Are Bringing Steam To China

    Valve has built a fancy new page that describes all the new features, which can be found here. The gaming company just announced Steam Chat , which is now in beta for anyone to try.
  • CD Projekt Red lifts lid on Cyberpunk 2077

    You can enjoy some new artwork below, showing scenes and player character samples for a male and female V. These multi-floor behemoths will include their own societies, vendors, quest givers and more.
    NCAA announces transfer, redshirt rule changes

    NCAA announces transfer, redshirt rule changes

    Upon being entered into the database, college coaches will be allowed to contact the athlete freely and without permission. Under the new guidelines, athletes will simply notify their current school of their desire to transfer.
    Trump's trade adviser apologizes for saying Trudeau has 'special place in hell'

    Trump's trade adviser apologizes for saying Trudeau has 'special place in hell'

    Trump's complaint is that Canada-U.S. discussions went well behind closed doors at the G7 meeting in La Malbaie, Que., but Mr. Also on Monday, former Trump aide and a former Breitbart editor Sebastian Gorka criticized Trudeau, calling him "childish".

Breaking News



Recommended

Coalition battles Houthis to liberate Hodeida

The Houthis deny they are Iranian pawns and say their revolt aims to target corruption and defend Yemen from invaders. Tribal fighters loyal to the Yemeni government stand by a tank in al-Faza area near Hodeida, Yemen June 1, 2018.

E3 2018: VR Title Transference Gets New Trailer and Release Window

Elijah's studio, Spectre Vision, is aiming to bring a first-person exploration game into a chilling new dimension. It's upon you to uncover the secret of the family and make their lives better by exploring maze-like puzzles.

Justify wins the Belmont Stakes and completes the Triple Crown

Triple Crown victor Justify is ready to start the next portion of his career, becoming the most valuable stud horse in the world. Honestly, I felt a little bit guilty that I had a stud deal and he had to retire at end of his 3-year-old season. "As such, Mr.

Trump confused by Trudeau's 'pushed around' comment: 'We just shook hands!'

The President said he had told fellow G7 nations that the USA requires fair market access and end to unfair trading practices. So far, numerous tariffs under discussion have been threatened but not yet implemented.

Trump's top economic adviser accuses Trudeau of 'backstabbing'

Kudlow further called Kim as "crazy nuclear tyrant" as he urged the other members of G8 to support Trump. Trump aides accused Trudeau of betrayal of Trump for his statement on retaliation.

Farrah Abraham Arrested for Allegedly Fighting at the Beverly Hills Hotel

She was involved in a heated argument with a male employee of the hotel that escalated until Abraham allegedly struck the man. The reality star was reportedly shouting things like, "I'm a celebrity", and, "You should know who I am", according to TMZ .

Red Cross launches Missing Types campaign

US health officials say they need to collect more than 13 million blood units annually to meet patients' needs. Thirty-eight percent of the population is eligible to donate blood.

White House to block Congress from stopping ZTE deal

Visitors pass in front of the Chinese telecom giant ZTE booth February 26 at the Mobile World Congress in Barcelona. Senator John Cornyn (R-TX) said, "China is using its telecommunications companies as means to conduct espionage".

Dixons Carphone reveals it has uncovered unauthorised access of customer’s data

Some security experts said that the leaked personal information was arguably a greater threat than the compromised card data. The breach was now being investigated by police, it said, while regulators had also been informed.

Texomans react to net neutrality repeal

They can also set up "fast lanes" for preferred services - in turn, relegating everyone else to "slow lanes". Comcast has also said it does not block or slow content and has no plans to offer paid prioritization.