Fed Raises Interest Rates, Signals 2 More Hikes This Year

Fed Raises Interest Rates, Signals 2 More Hikes This Year

The Fed's twin mandate is to bolster employment while controlling inflation, and in the current environment more rate rises appear inevitable. Ahead of the announcement, markets were pricing in a almost 100% chance of a rate hike.

Estimates of longer-run interest rates were unchanged and seen reaching as high as 3.4 percent in 2020 before dropping to 2.9 percent in the longer run.

This hike, which was widely expected, is the Fed's second of 2018, and the central bank signalled it is likely to do two more increases by the end of this year. The Fed has indicated that it is likely to raise rates three or four more times this year.

Following the Fed's rate decision, the FOMC releases its statement regarding monetary policy.

In their statement, Fed policymakers noted that the labor market "has continued to strengthen and that economic activity has been rising at a solid rate". Investors had given just over a 91 percent chance of a rate rise on Wednesday, according to an analysis by CME Group.

The Federal Reserve expects the USA gross domestic product to grow by 2.8% in 2018, up from March's forecast of 2.7%. For 2020, the Fed foresees a median rate of 3.4 percent.

In SC Primary, Ardent Trump Backer Defeats Rep. Mark Sanford
Sanford has also split with own party, perhaps most notably in this coastal district, on human contributions to climate change . First they must settle a seven-way primary field led by Attorney General Janet Mills and former state House Speaker Mark Eves.

The committee sees further declines the unemployment.

Projections released after the Fed's two-day meeting in Washington show policymakers expect the USA economy will grow 2.8% this year, while unemployment falls to 3.6%. The central bank is aiming to keep record low unemployment and a glut of federal spending from pushing inflation beyond the Fed's 2 percent target.

Negative for gold though is that the central bank also forecasts tame inflation pressures throughout year.

The Fed's pace of rate hikes for the rest of the year could end up reflecting a tug of war between a sturdy economy and the risks to growth, including from a potential trade war that could break out between the United States and such key trading partners as China, the European Union, Canada and Mexico. Inflation expectations are slightly higher this year compared to March's forecast of 1.9%. At this point, there's been little evidence that wage or price inflation is accelerating. Inflation for the next two years is expected to remain at 2.1%, unchanged from the previous forecast. It is not a solicitation to make any exchange in commodities, securities or other financial instruments.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc.

Related Articles

  • Angelina Jolie Could Lose Physical Custody of Kids to Brad Pitt

    Angelina Jolie Could Lose Physical Custody of Kids to Brad Pitt

    The "Ocean's 13" star also has to spend time with each child at least twice during this 10-day period. From July 21 through July 29, Pitt gets custody of the kids when he returns to California.

    Raccoon scales St. Paul office tower, captivating public

    By Wednesday morning it had made it to the roof of the building, easing fears that it would plummet to its death. The critter was first spotted at the Town Square building, huddled in a nook above the sidewalk.
    Johnson grabs PGA St. Jude lead

    Johnson grabs PGA St. Jude lead

    Dustin Johnson surged his way back to being the world's best, sinking an eagle from 155 metres out on the final hole at the St. CHASING: Well, there's really nobody technically chasing as Johnson and Putnam are five in front of everybody else.
  • After winning Brexit compromise, UK's pro-EU rebels fear betrayal

    After winning Brexit compromise, UK's pro-EU rebels fear betrayal

    They believe that if there is no Brexit deal by the end of November, the government must clear its next course of action with MPs. However, Devon Tory Sarah Wollaston signalled that she would back Mr Grieve's amendment.
    No impact from farmers' blockade on refinery operations - Total

    No impact from farmers' blockade on refinery operations - Total

    The move came after the French energy giant Total chose to use a cheaper, imported palm oil at its biofuel plant. Total's initiative to import palm oil for its biofuel plant was just "the last straw", the representative added.
    Russian Federation  2018: Neymar led Brazil thrash Austria in final warm up match

    Russian Federation 2018: Neymar led Brazil thrash Austria in final warm up match

    The European champions play Spain in the 2014 Winter Olympics host city Sochi in the opening match for both nations on Friday. It might give you a panic attack. 'We need Neymar on the field'. "Not only was the attack well, the group went very well".
  • Photos of Prince George playing with toy gun spark heated debate

    Photos of Prince George playing with toy gun spark heated debate

    The incident brought back memories of the 2016 Trooping the Colour when William, 36, was scolded by Queen Elizabeth to stand up. Savannah drew attention at Trooping the Colour after putting her hand over little George's mouth as he sang the National Anthem.
    Salah remains doubtful for WCup opener

    Salah remains doubtful for WCup opener

    Mohamed Salah joined the rest of Egypt's World Cup squad for warmup drills Tuesday and dribbled for the first time since injuring his left shoulder in last month's Champions League final.
    USA, Canada and Mexico to host football World Cup 2026

    USA, Canada and Mexico to host football World Cup 2026

    The 2026 tournament will be the biggest World Cup ever held - with 48 teams playing 80 matches over 34 days. England, like Morocco, knows the feeling of falling short in the bid to host the World Cup.
  • Rose McGowan Indicted On Felony Count Of Cocaine Possession

    Rose McGowan Indicted On Felony Count Of Cocaine Possession

    Rose McGowan was indicted for cocaine possession by a grand jury on Monday and sis could face up to 10 years in prison. On October 30, McGowan first publicly responded to the existence of the warrant on Twitter.

    Statement: PM Delighted Over Prince Harry And Duchess Visit

    Meghan Markle played Rachel Zane on Suits for seven seasons. " She was still near the heart of the action", Little says. She also wore pink for her very first royal outing on May 22, as well as an nearly identical hat.
    Avengers: Infinity War passes $2 billion at box office

    Avengers: Infinity War passes $2 billion at box office

    It's the only the tenth film in China's history to earn more than 2 billion yuan in total and just the third import film to do so. Marvel's superhero blockbuster is currently the fourth highest-grossing movie of all time (for now).