The US Federal Reserve raised the benchmark lending rate on Wednesday, the second increase of the year, and signalled it will be more aggressive about rate increases this year and next amid "strong" economic growth.
- Fed funds price in an 81% chance of a 25-bps rate hike in September, and odds for December increased from 51% to 57% as Fed Chair Powell's press conference got under way.
Officials now expect four rate rises this year, not three as the balance of policymakers has shifted since March. Inflation by the Fed's preferred gauge would hit its 2 percent target this year and edge up to 2.1 percent over the next two years. The Fed's unemployment rate level declined to 3.6%, but inflation remained stable. Even amid concerns about USA trade policy, the Fed raised its forecast for gross-domestic-product growth this year to 2.8% from 2.7%.
With employers hiring at a solid pace month after month, unemployment has reached 3.8 per cent. The most immediately affected will be credit-card interest rates, which are subject to near-instantaneous revision to track the federal funds rate.
The central bank also signaled two more hikes are coming in 2018 and four in 2019, a possible sign of concern about accelerating inflation in the US.
In addition to a new dot plot, the Fed updated its forecasts for economic growth and inflation.
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Beginning in 2008 in the midst of the financial crisis, the Fed kept its key rate unchanged at a record low near zero for seven years.
Eurozone Q1 employment rose 0.4% quarter over quarter, a slight acceleration from the 0.3% quarter over quarter in Q4 last year, but still leaving the annual rate at just 1.4% year over year, down from 1.6% year over year in Q4 last year and versus 1.7% in Q3 2017.
TOKYO, June 13 (Reuters) - Asian shares fell on Wednesday as investors braced for a Federal Reserve policy decision later in the day and any clues it might give on future rate hikes that could alter the course of global economic growth and corporate earnings. When the Fed tightens credit, it aims to do so without derailing the economy.
Fed officials and many economists worry that the low jobless rate could force employers to hike wages faster, as companies compete for workers. The median estimate implied three increases in 2019 to put the rate above the level where officials see policy neither stimulating nor restraining the economy.
A global trade war would risk cutting into USA economic growth by depressing American export sales and raising inflation by making consumers and businesses pay more for imports.