INSUBCONTINENT EXCLUSIVE:
Federal Reserve officials raised interest rates for the second time this year and upgraded their forecast to four total increases in 2018,
as unemployment falls and inflation overshoots their target faster than previously projected.
The so-called “ dot plot” released
Wednesday showed eight Fed policy makers expected four or more quarter-point rate increases for the full year, compared with seven officials
during the previous forecast round in March
The number viewing three or fewer hikes as appropriate fell to seven from eight
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.
Key highlights of the Fed meet:Median forecast signals two more hikes in 2018Fed sees three rate increases next
yearIt was seventh rate hike by Fed in this cycleFed lowers inflation forecast Fed leaves GDP forecast largely unchangedThe Federal Open
Market Committee indicated that even though it's stepping up the pace of interest-rate hikes, economic growth should continue apace
“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,” according to its statement following a meeting in Washington.
The statement omitted previous language saying that the main
rate would remain “for some time” below longer-run levels
Other changes included referring to “further gradual increases” instead of “adjustments.” Officials also said that “indicators of
longer-term inflation expectations are little changed.” Previously, the statement made separate references to survey-based and
market-based measures of such expectations.
