Erstmals for a year, the US Central Bank has raised the key interest rate. He rises slightly, by 0.25 percentage points to a level of between 0.5 and 0.75 percent, as the Federal Reserve announced on Wednesday in Washington. It is the only the second rate increase step of the Central Bank within a decade.
Even with this increase, the key rate remains at a very low level. The Fed, however, takes a further three Interest rate increases for the coming year. According to their forecasts, the interest rate should be then end of 2017, at 1.4 percent. By the end of 2018 it is forecast to rise further to 2.1 percent.
In its forecasts in September, the Central Bank had targeted only two Interest rate increases for the next year and a slightly lower interest rate stands for the end of 2017, and 2018. The current increase in interest rates was a “vote of confidence” in terms of solid growth of the US economy, said Central Bank chair Janet Yellen.
The current increase in the interest rate was, in General, been of the analysts expected. Yellen had announced that the Central Bank head for such a decision. It was the first interest rate decision of the Fed since the election of the future President Donald Trump.
The Republicans had attacked Yellen in the election campaign hard. He accused her, for political reasons, the increase in interest rates, artificially postpone. She wanted so the economic balance sheet of the outgoing President, Barack Obama, externally renovate or update. The Fed Boss should be ashamed of themselves, therefore, “is”, ranted Trump.
The Fed had finished in December 2015, the Era of zero interest rates, the initiated at the end of 2008 in response to the financial crisis. Also a year ago, they increased the key interest rate cautiously by 0.25 points.
In the course of this year, the Central Bank had postponed a further interest rate increase. The decision referred, inter alia, on global risks such as the slowdown of Chinese growth and the EU-Referendum of the British people.
The current increase interest rates was taken by the ten members of the so-called open market Committee of the Bank unanimously. At the same time, they also corrected its forecast for the development of the US economy slightly upwards. Accordingly, the gross domestic product (GDP) will rise until the third quarter of 2017, compared to the prior year period by 2.1 percent. This is 0.1 points more than the Fed three months ago, previously had said.
To your step, the Fed is encouraged by recent US economic data. The unemployment rate fell in November by 0.3 points to 4.6 percent, the lowest level in nine years.
The Inflation was at 1.6 per cent and approached the level of 2.0 percent, which keeps the Fed is desirable – you see in this brand the best value for price stability and a healthy labour market situation.
In its forecasts for the US economy, the Fed remained cautious. The labor market is gaining strength, but unemployment remains “increased”. The investments of the company have not yet to the same extent as expenditure of private households.
The Fed has not hinted whether they are gearing up for possible inflation risks for the economic policies of the elected President. Many analysts predict that the Central Bank must be lifting because of the of Trump announced massive tax cuts and huge investments in infrastructure the interest rate sooner than planned. These plans mountains, therefore, the risk that Inflation shoots above the 2.0 percent target.
Yellen, said only, changes in economic policy could change the projections. However, it is currently “too early” to predict how the price of the new President will have an impact.