The first Federal Reserve meeting under the leadership of new chair Jerome Powell held few surprises yesterday. As widely expected, the Fed raised its benchmark federal-funds rate by a quarter percentage point to between 1.5 percent and 1.75 percent. That is the sixth quarter-point move since December 2015.
The Fed stuck to last December's forecast of three interest-rate hikes this year, but central bankers did push up their expected rate path in 2019 and 2020, however. The Fed now sees a total of eight quarter-point hikes in the Fed funds rate through the end of 2020: three increases this year, including Wednesday’s move, three in 2019 and two in 2020. By the end of 2020, rates would be near 3.4 percent.
In its statement, the Fed said “the economic outlook has strengthened in recent months.” It also said that household and business investment “have moderated from their strong fourth-quarter readings.”
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