Fed raises key rate, sees acceleration in future hikes
WASHINGTON — The Federal Reserve has raised its benchmark interest rate for the second time this year and signalled that it may step up its pace of rate increases because of solid economic growth and rising inflation.
The Fed now foresees four rate hikes this year, up from the three it had previously forecast.
The central bank on Wednesday raised its key short-term rate by a modest quarter-point to a still-low range of 1.75 per cent to 2 per cent. The move reflects the economy’s resilience, the job market’s strength and inflation that’s finally nearing the Fed’s target level.
The action means consumers and businesses will face higher loan rates over time.