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Fed Raises Fed Fund Rate 1/4%, Sees Two More Rate Increases In 2017

Fed Raises Fed Fund Rate 1/4%. Sees Two More Rate Increases in 2017

U.S. central bankers see no major changes in their economic outlook


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WASHINGTON—Federal Reserve officials still expect to raise short-term interest rates two more times this year after lifting them Wednesday—and they see no major changes in their economic outlook. 

In economic projections released Wednesday following a two-day policy meeting, officials also penciled in three more quarter-percentage-point moves in 2018. They also see interest rates settling at their long-run average of 3% by the end of 2019, slightly sooner than they foresaw in their December projections. 

Officials took the first step Wednesday by raising their benchmark federal-funds rate as expected by a quarter-percentage-point to a range between 0.75%and 1 %.  ...

Wednesday’s projections show Fed officials see the economy growing 2.1% in 2017, the same pace as in December. They see growth at 2.1% in 2018 and 1.9% in 2019 before settling at its longer-run average of 1.8%. 

They expect an unemployment rate of 4.5% at the end of the next three years. Projections for the longer-run unemployment rate ticked down to 4.7% from 4.8% in December. 

Officials see inflation ending the year at 1.9% and rising to the Fed’s 2% target by 2018.

Write to David Harrison at