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Fed Expected to Up Rates; Will Hikes Continue?

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June 13, 2018 by   Leave a Comment

Federal Reserve Chairman Jerome Powell

The Federal Reserve is set today (June 13) to modestly raise its key short-term interest rate for the second time this year. But attention will be focused mainly on any hints that the Fed might accelerate its rate hikes in the coming months.

According to an ABC News report, some economists think the Fed will signal that it expects to raise rates four times this year, up from its current projection of three hikes. Others believe the central bank will stick with its projection of three rate increases, partly out of concern that rising trade tensions triggered by President Donald Trump’s aggressive policies might slow global growth.

The policymakers will reveal their action in a policy statement and in updated economic forecasts, followed by a news conference by Chairman Jerome Powell. Some analysts are speculating that Powell may announce that he will begin holding a news conference after each of the eight policy meetings the Fed holds each year, rather than only once a quarter.

When the Fed last met in May, it left its short-term rate unchanged. But it noted that inflation was edging near its 2 percent target after years of remaining undesirably low. Should inflation eventually pick up, the Fed might move to tighten credit more aggressively.

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