Fed. Reserve Raises Benchmark Interest Rate .25 Point to 1.5%

Washington, DC, December 14, 2017-The Federal Reserve announced that it will raise the benchmark interest rate from its current 1.25% to 1.5% this year.

In addition, the Reserve foresees three more increases: to 2% in 2018, 2.5% in 2019 and 3% in 2020.

In 2008, during the Recession, the Federal Reserve lowered the benchmark interest rate to 0.25%, raising it to 0.5% in December 2015.

“At the moment, the U.S. economy is performing well,” Federal Reserve chair Janet L. Yellen said during the news conference on December 13. “There’s less to lose sleep about now than has been true for quite some time.”

“The Fed cast the decision as a positive sign of how much momentum the U.S. and global economies have right now as employers keep hiring and families and businesses continue to open their wallets and spend,” reports The Washington Post. “Unemployment is at the lowest level since 2000, growth is picking up, and inflation remains tame. The Fed also bumped up its expectations for growth this year and next. The economy is on track to expand 2.5% this year and in 2018, the Fed now says. It's previous estimate was for a 2.1% expansion in 2018. Unemployment is expected to fall even further to below 4% in 2018. The tax bill was a key driver of the improved forecast, although the Fed stopped well short of forecasting the 4% growth that President Trump has been promising he can deliver.”