Fed increases rates by 25bps; hints at two more hikes in 2017

Third rate rise since December 2015

Daniel Flynn
clock • 2 min read

In a move that had been widely expected by markets, the Federal Reserve has increased US interest rates by a further 25 basis points (bps), marking its third rise since December 2015, as the US economy continues to improve.

Following its two day March meeting, the Federal Open Market committee (FOMC) has increased the Federal Funds Rate in the US to 0.75%-1% up from 0.5%-0.75%. In its forward guidance, the Fed confirmed it expects to stick to its forecast of three rate increases in 2017. All but one committee member - Neel Kashkari - voted to increase rates again after increasing them to 0.5%-0.75% from 0.25%-0.5% last December. Interest rates moved upwards for the first time since 2006 in December 2015 from lows of 0%-0.25%. Following the news, the US dollar index, which gauges the value against a baske...

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