For the second time in three months, the Federal Reserve increased its benchmark interest rate a quarter point amid rising confidence that the economy is poised for more robust growth.
The move, widely anticipated by financial markets, takes the overnight funds rate to a target range of 0.75 percent to 1 percent and sets the Fed on a likely path of regular hikes ahead. Minneapolis Fed President Neel Kashkari was the sole “no” vote.
Despite a well-telegraphed move, news of the rate hike pushed government bond yields lower while major averages in the stock market moved higher.
The Fed on Wednesday indicated that it still expects three moves. In its statement, the central bank noted that business investment has “firmed somewhat,” a slight upgrade from the characterisation of “soft” after the Jan. 31-Feb. 1 meeting.
The market expects the next hike to come in June and another in December. Those probabilities increased a bit following Wednesday’s decision.
source: cnbc.com