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发帖数: 2968 | 1 By Howard Schneider and Lindsay Dunsmuir
WASHINGTON (Reuters) - The U.S. Federal Reserve raised interest rates by a
quarter point on Wednesday and signaled a faster pace of increases in 2017
as the Trump administration takes over with promises to boost growth through
tax cuts, spending and deregulation.
The rate increase, regarded as a virtual certainty by financial markets in
the wake of a string of generally strong economic reports, raised the target
federal funds rate 25 basis points to between 0.50 percent and 0.75 percent
. Bond yields and the dollar rose after the rate decision while stocks were
mixed with financials and tech the only two sectors to show gains.
"In view of realized and expected labor market conditions and inflation, the
committee decided to raise the target range," the central bank's policy-
setting committee said in its unanimous statement after a two-day meeting.
"Job gains have been solid in recent months and the unemployment rate has
declined," the Fed said, noting that market-based measures of inflation
compensation had moved up "considerably."
More significant was a fresh batch of Fed policymaker forecasts that
indicated the current once-a-year pace of rate increases will accelerate
next year. Markets and the Fed appeared to be close on pricing with Fed
futures markets pricing in at least two and possibly three hikes, up from
one to two prior to the meeting.
With President-elect Donald Trump planning a simultaneous round of tax cuts
and increased spending on infrastructure, central bank policymakers shifted
their outlook to one of slightly faster growth, lower unemployment and
inflation just under the Fed's 2 percent target.
The Fed's median outlook for rates rose to three quarter-point increases in
2017 from two as of September. That would be followed by another three
increases in both 2018 and 2019 before the rate levels off at a long-run "
normal" 3.0 percent.
That normal level is slightly higher from three months ago, a sign that the
Fed feels the economy is still gaining traction.
“They didn’t mention the fiscal stimulus but typically their
aggressiveness does indicate that there’s a little more confidence that
they can get away with three hikes next year," said Aaron Kohli, interest
rate strategist at BMO Capital Markets.
The Fed continued to describe that pace as "gradual," keeping policy still
slightly loose and supporting some further improvement in the job market. It
sees unemployment falling to 4.5 percent next year and remaining at that
level, which is considered to be close to full employment.
Fed Chair Janet Yellen is scheduled to hold a press conference at 2:30 p.m.
ET (1930 GMT) to elaborate on the decision.
TRUMP IMPACT
U.S. bond yields had already begun moving higher following the election and
as expectations of the Fed rate increase solidified. By the start of this
week, trading in fed funds futures assigned a greater than 95 percent
likelihood to a rate hike, according to data compiled by the CME Group (
NASDAQ:CME).
All 120 economists in a recent Reuters poll had expected a rate hike on
Wednesday.
In the weeks following Trump's Nov. 8 victory, Fed policymakers have said
his proposals could push the economy into a higher gear in the short run.
Even though the details of the Republican businessman's plans remain
uncertain, Wednesday's statement marked a rare case in the post-crisis era
in which the Fed moved its interest rate outlook higher.
Risks to the outlook remain "roughly balanced" between factors that could
slow or accelerate the economy beyond what the central bank anticipates, the
Fed said, no change from the November assessment.
The rate increase was the first since last December and only the second
since the 2007-2009 financial crisis, when the Fed cut rates to near zero
and deployed other tools such as massive bond purchases to stabilize the
economy. |
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