Industry News

Fed raises target rate to 2%

Future-Proof: Navigate Threats, Seize Opportunities at ICNY 2018 | Jan 22-26 at the Marriott Marquis, Times Square, New York

The Federal Reserve's Open Market Committee today continued its course of raising its target for the federal funds rate by .25 percent, bringing it to 2 percent. The move is the fourth hike in five months, beginning with a 25 basis point hike in June. That was the first time the Fed had raised the rate in four years, and the Fed appears poised for more rate hikes until it reaches what it considers a neutral monetary policy. Mortgage rates have not followed suit yet, although they could be poised to rise soon. The benchmark 10-year Treasury bond yield has been rising, going to 4.26 percent on a $14 billion U.S. Treasury sale today. Just two weeks ago, the yield hovered below 4 percent. The Fed changed little in its policy statement from its last meeting, saying it believes that even after today's hike, its monetary policy remains accommodative. Combined with "robust underlying growth in productivity," the monetary policy is providing ongoing support to economic activity, according to ...