The Federal Reserve has raised a key interest rate by one quarter on Wednesday despite criticism from President Donald Trump.
The central bank moved ahead with the interest rate hike over Trump’s protests, making it the fourth interest rate hike of the year already.
According to the Washington Examiner:
Federal Reserve Chairman Jerome Powell said in a speech last month that interest rates “are still low by historical standards” due to the prolonged period that the Fed kept rates unusually low following the 2008 global financial crisis, and they could continue to rise next year as the Fed hopes to keep them neutral — neither speeding up nor slowing down economic growth.
The Fed Chairman has made no bones about the fact that he feels it is time to put the brakes on the booming economy in an effort to stave off inflation.
“The central bank’s leaders still see a strong outlook for the U.S. economy in 2019, but concerns are growing that the Trump administration’s trade wars and other geopolitical events, like the culmination of the U.K.’s exit from the European Union, could drag on U.S. economic growth,” the Examiner added.
Trump slammed the move saying “it is incredible” that “the Fed is even considering yet another interest rate hike.”
It is incredible that with a very strong dollar and virtually no inflation, the outside world blowing up around us, Paris is burning and China way down, the Fed is even considering yet another interest rate hike. Take the Victory!
— Donald J. Trump (@realDonaldTrump) December 17, 2018
Trump clearly feels that hiking interest rates will dampen the booming economy and bring his economic agenda to a standstill.
The Fed is also considering two more hikes next year, sources say.
“The Committee judges that some 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,” the Fed’s statement said on Wednesday.
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