The Federal Reserve is raising its benchmark interest rate to reflect a solid U.S. economy and signaling that it's sticking with a gradual approach to rate hikes for 2018 under its new chairman, Jerome Powell. The Fed said it expects to increase rates twice more this year. At the same time, it increased its estimate for rate hikes in 2019 from two to three, reflecting an expectation of faster growth and lower unemployment.
United States Federal Reserve officials grew more positive on the economic outlook, citing “substantial underlying economic momentum,” and were increasingly optimistic about achieving their inflation target, according to minutes of last month’s policy meeting.
Jerome Powell was sworn as the 16th chairman of the Federal Reserve on what turned out to be a turbulent day for Wall Street, with the Dow Jones industrial average plunging by more than 1,100 points. Powell, 65, was given the oath of office by Randal Quarles, the Fed's vice chairman for supervision, in a ceremony that took place before stock trading opened on Wall Street.
President Donald Trump has said he will announce on Thursday his choice to lead the seven/member Federal Reserve board beginning in February. Jerome Powell, a Fed board member, is assumed to be the top contender and Trump anticipated that “I think you will be extremely impressed by this person”.
The Federal Reserve has started to run down some of the investments it made to boost the US economy after the financial crisis. The Fed holds a US$4.2trn portfolio of US Treasury bonds and mortgage-backed securities, and it will initially cut up to US$10bn each month from the amount it reinvests.
The United States Federal Reserve Vice Chairman Stanley Fischer will resign next month for personal reasons, leaving a fourth vacancy on the seven-member Fed governing board. Fischer is a widely-respected economist who taught at MIT, was head of the Bank of Israel for eight years and vice chairman at Citigroup.
United States President Donald Trump named two possible candidates to run the Federal Reserve over the next few years: current Fed Chair Janet Yellen and Trump's economic adviser Gary Cohn, according to an interview with The Wall Street Journal.
Leaders of the U.S. central bank said Wednesday that they were holding their benchmark lending rate at a low level — in a range between 1 and 1.25% — for the time being. Federal Reserve officials said in a report issued after their two-day policy meeting that the world's largest economy was growing at a moderate pace and the job market was improving, but that inflation remained a bit low.
The Federal Reserve announced on Wednesday that it held its benchmark interest rate after a two-day policy meeting, as had widely been expected. And it added that the recent showdown in US growth is likely temporary.
President Donald Trump has said his administration will not label China a currency manipulator, rowing back on a campaign promise. The US president also left open the possibility of re-nominating Janet Yellen as the head of the Federal Reserve, despite having criticized her.