Fed raises rates, suggests more to come

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Ready for more fancy fiscal policy talk?

Not only did the FOMC raise the funds rate target, which was totally expected, it sent some pretty clear signals about future rate hikes.

Market participants also pondered the impact of the Fed's rate hike on Wednesday.

The Fed also raised the estimated longer-term "neutral" rate, the level at which monetary policy neither boosts nor slows the economy, a touch, in a sign the current gradual rate hike cycle could go on longer than previously thought. He gave brief and direct answers in his first press meet while indicating that he would hold more press conferences. Financial markets largely took the move in stride.

Vitner predicted that the central bank will end up raising rates four times this year despite its forecast for three. Any widespread default on debt today would be reminiscent of the 2004-2006 period when the Fed's raising of rates to tackle inflation led to a mass default on USA mortgage debt. But they fall far short of the 3 percent annual growth that the Trump administration has argued will be achieved with the implementation of its economic program. Inflation is projected to remain at 1.9 per cent in 2018 and 2 per cent in 2018, both unchanged from the December forecast.

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But the Fed's new forecast does envision somewhat stronger economic growth compared with its previous estimate: It raises the estimate to 2.7 percent growth this year, up from 2.5 percent in the December projection, and 2.4 percent in 2019, up from 2.1 percent. The unemployment rate is expected to drop to 3.6% in 2019. That's nearly a full percentage point below the 4.5% rate at which the central bank believes wage-related inflation would accelerate. Notably, this is the sixth increase in interest rates since the financial crisis, which led the Fed to lower rates to almost zero. Sigma Healthcare plunged 7.4 percent after its full-year underlying profit fell more than 10 percent. The strength of the U.S. and global economy will also support the ongoing recovery in the Indian economy.

Lael Brainard, a Fed governor who has been less hawkish than many of her colleagues, said in a speech this month that in many ways, "today is the mirror image of the environment we confronted a couple of years ago". For instance, the three-month dollar London interbank offered rate, or Libor, is at its highest level since 2008. That's forecast to pick up to 8.1 percent in 2018 as rising global interest rates boost margins.

Americans with credit card debt are especially vulnerable to rising interest rates. "The prospect of more tariffs is making markets very unsettled and you're going to see choppy trading until we see the effect they are having on earnings", said Jamie Cox, a managing partner for Harris Financial Group. Applicants must set up local units, establish payment infrastructure - including disaster recovery systems - and store client information domestically, the central bank said. Foreign investors, for example, have sold bonds worth over $2 billion in Indian markets over the last one month.

Concern about a trade war between the world's two largest economies also rattled commodity markets. Even $37.50 a year, the amount three quarter-point rate increases this year would add, may not shock households.

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