Fed raises target range for federal funds rate to 2% to 2.25%
SAN JUAN – The Federal Reserve said Wednesday that information it received since the Federal Open Market Committee met in August indicates that the U.S. labor market continued to strengthen and that economic activity has been rising at a strong rate, according to a release issued
“Job gains have been strong, on average, in recent months, and the unemployment rate has stayed low. Household spending and business fixed investment have grown strongly. On a 12-month basis, both overall inflation and inflation for items other than food and energy remain near 2 percent. Indicators of longer-term inflation expectations are little changed, on balance,” the release reads.
Seeking to foster employment and price stability, the committee expects that further gradual increases in the target range for the federal funds rate “will be consistent with sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee’s symmetric 2 percent objective over the medium term. Risks to the economic outlook appear roughly balanced.”
The committee raised the target range for the federal funds rate to 2 to 2-1/4 percent.
In determining the “timing and size of future adjustments to the target range for the federal funds rate, the Committee will assess realized and expected economic conditions relative to its maximum employment objective and its symmetric 2 percent inflation objective.”
Its assessments take into account such information as labor market conditions, inflation pressures and expectations, and financial and international developments.
This is the third time the Fed raises the key rate this year. Chairman Jerome Powell forecasted another rate hike before the end of the year and predicted it will continue to tighten credit for the next couple of years to address inflation.