The Federal Reserve (Fed) decided to raise the federal funds rate by 25 basis points, to to a range of 1.5% to 1.75% at the meeting on March 20-21. It is said in the communique of the Federal Open Market Committee (FOMC).
“In view of realized and expected labor market conditions and inflation, the Committee decided to raise the target range for the federal funds rate to 1.5% - 1.75 %. The stance of monetary policy remains accommodative, thereby supporting strong labor market conditions and a sustained return to 2 percent inflation.”, says the Fed’s press release.
The Fed’s previous decision to raise the interest rate was taken on December 13, 2017.
As Reuters reported earlier, in late 2017, The Fed expected three federal funds rate hikes in 2018. At the same time, some investors believe that fiscal stimulus and the signs of inflation pressure can result in one more increase of the interest rate.