Federal reserve lifts rates for 4th time this year
148 views · Published 24 December 2018 · 4:27 · Indexed 6 October 2026
Channel: AP Archive · 2018 · News & Politics
(19 Dec 2018) 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. The quarter-point hike, to a range of 2.25 percent to 2.5 percent, lifted the Fed's benchmark rate to its highest point since 2008. The increase will mean higher borrowing costs for many consumers and businesses. The statement the Fed issued Wednesday after its latest policy meeting says "some" further gradual rate increases are likely. But its updated forecast projects just two rate hikes next year, down from three the Fed had predicted in September. The new forecast also reduces the long-run level for the Fed's benchmark rate to 2.8 percent, down from 3 percent. The Fed has raised rates with steady regularity as the U.S. economy has strengthened. Wednesday's was the Fed's ninth hike since it began gradually tightening credit three years ago. But a mix of factors - a global slowdown, a U.S.-China trade war, still-mild inflation, stomach-churning drops in stock prices - has led the Fed to consider slowing its rate hikes in 2019 to avoid weakening the economy too much. It's now likely to suit its rate policy to the latest economic data - to become more flexible or, in Fed parlance, "data-dependent." Find out more about AP Archive: http://www.aparchive.com/HowWeWork Twitter: https://twitter.com/AP_Archive Facebook: https://www.facebook.com/APArchives Instagram: https://www.instagram.com/APNews/ You can license this story through AP Archive: http://www.aparchive.com/metadata/youtube/411b1c3c2a20cd4a4ba9fbdb3fd45f2d
