The U.S. Federal Reserve raises interest rates by a quarter point and signales a faster pace of increases in 2017. Bobbi Rebell reports.
The U.S. Federal Reserve raised the target federal funds rate 25 basis points, to between 0.50 percent and 0.75 percent. The Fed also signaled a faster pace of increases in 2017 taking into consideration President-elect Donald Trump's promises to boost growth through tax cuts, spending, and deregulation. U.S. Fed Chair Janet Yellen: (SOUNDBITE) JANET YELLEN, CHAIR, THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM (ENGLISH) SAYING: "Our decision to raise rates is, should certainly be understood as a reflection of the confidence we have in the progress the economy has made, and our judgment that that progress will continue." The Fed described the pace of U.S. economic growth as gradual, and said it sees unemployment falling to 4.5 percent next year, and staying at that level, which is considered to be close to full employment. ECRI's Lakshman Achuthan. (SOUNDBITE) LAKSHMAN ACHUTHAN, CO-FOUNDER & CHIEF OPERATIONS OFFICER, ECONOMIC CYCLE RESEARCH INSTITUTE (ECRI), (ENGLISH) SAYING: "They signaled maybe an extra rate hike next year. And they're tryng to walk on a very, very fine line of 'we're continuing our lift-off, the economy is resilient enough for us to do this." This is the first rate increase since last December, and only the second since the financial crisis, when the Fed cut rates to near zero to stabilize the economy.