Thursday, December 17, 2015

Interest Rates Going... Down?

As expected, the Federal Reserve raised its benchmark interest rate yesterday, hiking the Fed funds rate by one quarter of one percent. At the same time, though, Fed officials lowered expectations for future interest rate hikes.

The Fed meeting is also the occasion for Fed officials to issue their interest rate projections for the upcoming years - the so-called dot plot. And some of those projections for 2017 and 2018 have been revised downward.

After October's meeting, for instance, one official saw rates going as high as 4 percent by 2017, but after this meeting, the highest 2017 projection has dropped under 3.5 percent. In October, three members projected rates in 2018 to be below 3 percent, but now, that number has increased to six.

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