Understanding interest rates and inflation
In the weeks after the Federal Reserve hiked interest rates, we’re still digesting the details and adjusting to the aftermath.After months of speculation, the Fed raised interest rates by 25 basis points, suggesting confidence in a stronger economy and sending signals that it believes economic activity will expand at a moderate tempo, rates will normalize and labor market conditions will strengthen.
Still, the Fed likes to proceed with caution. During a news conference, Fed Chair Janet Yellen stressed that the Federal Open Market Committee is keeping its timeline for future monetary tightening on track. “We haven’t changed the outlook,” she’s quoted as saying in The New York Times. “We think we’re moving on the same course we’ve been on.”
The Fed expects to raise rates two more times this year and three times in 2018. Wednesday’s hike was only the third such increase since the 2008 financial crisis but the second in just three months.
To read this article in whole click here; https://movement.com/blog/2017/03/17/understanding-interest-rates-and-inflation/