At long last, Fed raises Interest rates for first time in 2016

At long last, Fed raises Interest rates for first time in 2016

    At long last, Federal Open Market Committee announced in its December meeting that it is officially raising the federal funds rate a quarter-point in its target funds rate.

    A rate hike come for First Time in 2016 , and after seven years , and it is only the second time the U.S. central bank has raised interest rates since 2006, when the economy was yet to be hit by the financial crisis.

    The Central bank will nudge up the federal-funds rate by a quarter percentage point to between 0.50% and 0.75% . this Rising rates will affect millions of Americans, including home buyers, savers and investors.

    The Fed said in a statement after its two-day meeting that the rate increase came “in view of realized and expected labor-market conditions and inflation,” a sign officials see the labor market as close to, or at, full employment—the lowest level unemployment can reach without triggering too much inflation.Information received since the Federal Open Market Committee met in November indicates that the labor market has continued to strengthen and that economic activity has been expanding at a moderate pace since mid-year,” the statement said.  

    This increase doesn’t come as a surprise though, with odds from several sources saying there’s 100% chance that the Fed would increase rates. The minutes from the November meeting certainly seemed to point in that direction.
    In the other hand, stock markets fell shortly after the decision, underscoring the general uncertainty among market participants as to whether the Fed is striking the right balance between heading off inflation and providing adequate stimulus for the economy.

    mohammed rafat
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    writer and blogger, founder of Post Land .

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