Markets & EconomyMortgage

Fed announces third rate hike in 7 months

Committee cites strengthening labor market and declining inflation

As anticipated, today the Federal Reserve implemented a quarter-point federal funds rate hike, increasing its benchmark target to between 1 percent and 1.25 percent "in view of realized and expected labor market conditions and inflation," the Federal Open Market Committee said. The decision marks the fifth hike since December 2015, when the Fed first raised rates post-financial crisis after an eight-year hiatus. In March, the Federal Reserve governors voted to raise interest rates by 0.25 percent, to a range of 0.75 percent to 1.00 percent, citing a strengthening labor market and inflation running below 2 percent. Those factors have continued into the second quarter of 2017 with unemployment now at 4.3 percent and "on trend to fall to 3 percent-something by year-end," according to mortgage broker and Inman writer Lou Barnes. The Federal Reserve sets the rate for the overnight exchange of money by banks; governors adjust the rate to help curb inflation or stimulate growth, ...