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Fed raises rates by to 0.25%-0.50% as expected

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Dec 16, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Córdoba) - The Federal Reserve raised the target range for federal funds to 0.25% - 0.50% in an unanimous decision that was also widely expected by markets.

    “The Committee judges that there has been considerable improvement in labor market conditions this year, and it is reasonably confident that inflation will rise, over the medium term, to its 2 percent objective. Given the economic outlook, and recognizing the time it takes for policy actions to affect future economic outcomes, the Committee decided to raise the target range for the federal funds rate to 1/4 to 1/2 percent. The stance of monetary policy remains accommodative after this increase, thereby supporting further improvement in labor market conditions and a return to 2 percent inflation.”

    The Fed also said that economic conditions could warrant “only gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run.”

    Fed Chair Janet Yellen will address the press at 19:30 GMT.

    Fed dot plot


    The Fed also released the economic projections. FOMC officials made small changes in their views of economic activity, and they don't expect inflation to achieve their 2% target until 2018.

    The median expected federal funds rate target at the end of 2016 is 1.375%, matching September's projection. The median view of the longer-run level also held steady at 3.50%.
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