The US Federal Reserve raised interest rates for the first time in a year, and only the second time since the 2008 financial crisis. The US central bank also predicted three further rates increase in 2017, up from previous expectations of two rate hikes.
The Fed chairwoman, Janet Yellen, said “growth is a touch stronger, unemployment is a shade lower” as she announced a 0.25% increase in the benchmark rate to 0.50-0.75%.
It is the first time rates have been raised since December 2015 when the benchmark rate was lifted from near-zero for seven years since the crisis, the Guardian reports.
The rate setting Federal Open Market Committee (FOMC) said it expected to raise short-term rates by another 0.75% percentage points next year – probably in three separate quarter-point moves – up from a previously predicted 2017 increase of 0.5%.
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