US Fed raises interest rates by 0.25%; top takeaways from the FOMC meet

As expected, the US Federal Reserve raised short-term interest rates by a quarter percentage point or 0.25 per cent in its latest policy meet, that concluded Wednesday. It was the third rate hike by the US Fed this year and the eighth such move since December 2015.

Here're the key takeaways from the latest FOMC meet -
Rates move up
The Federal Open Market Committee (FOMC) increased the interest rates by 25 basis points, thus setting a new range of 2 per cent to 2.25 per cent. The move reflected an upbeat assessment of the economy that was identical to the Fed’s last policy statement eight weeks ago, despite concerns over Trump’s escalating trade war, Bloomberg reported. Growth and job gains have been “strong” and inflation remains near the central bank’s 2 per cent target, the FOMC said in its statement. Also, it has signalled one more rate hike this year and three more in 2019.

Analysts at Rabobank International said, "We would like to add that with recent data indicating that domestic momentum remains strong – the Atlanta Fed’s GDP nowcast for Q3 stood at 4.4 per cent on September 19 – it would take time for the trade war to slow US economic growth down to a pace that would concern the FOMC. Therefore, we now change our call to four hikes this year, with the next hike in December."

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