Fed Raises Interest Rates for Second Time in 2018, Signaling Economic Optimism


#1

The American Working citizens keep winning !
The Federal Reserve raised interest rates by a quarter of a percentage point Wednesday, reflecting widespread optimism about America’s economic outlook.

The rate increase, the second thus far in 2018 and the seventh since the Great Recession, will result in higher interest rates on credit cards, home-equity lines, and other forms of credit. The increase, which comes after a similar incremental hike in March, places the Fed’s benchmark rate between 1.75 and 2 percent.
Officials suggested that they will raise rates twice more in 2018, but with unemployment at a near-record low of 3.8 percent, some economists believe additional rate increases will be necessary to stave off inflation.
Ian Shepherdson, chief economist at Pantheon Macroeconomics, told NPR that the Fed is “scared of future inflation risk” prompted by the sudden wage increases that are expected as an economy nears full employment and firms are forced to compete for labor.

The Fed raised its headline inflation-rate forecast for the year to 2.1 percent, up from 1.9 percent in March. In announcing the decision, however, officials downplayed concerns about runaway inflation, saying “market-based measures of inflation compensation remain low.” During a press conference following the rate increase announcement, Fed Chairman Jerome Powell emphasized that corrective action would be taken only if inflation persists at well above or below 2 percent.
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Their statement also teased a significant increase that would return rates to historically typical levels, revealing that, “the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run.”

The expectation of additional future rate increases reflects an increased optimism about the economy. Quarterly economic projections released Wednesday show thayt officials expect the economy to grow at a rate of 2.8 percent, up from 2.7 percent in March.


#2

The down side of higher interest rates is higher interest rates in the 21 Trillion debt.


#3

Right, I thought increased rates were a bad thing for us? I’m no economic expert but I always thought that meant what we borrow from our personal banks will have higher interest rates slapped on them.


#4

Fed’s benchmark rate between 1.75 and 2 percent. Is still very cheap money and saving accounts can start making a little interest .


#5

In the past it wasn’t a big deal. Today, 21 trillion debt.

Do the math for the impact.

The last 2 presidents and their congresses have truly hosed this country.


#6

The last 12 months had a 2.8% interest rate.

Guess savers will just lose a little less.


#7

This is the road we find our self’s on adjust adapt and move forward ! Doing the right thing is not always easy but it’s always the right thing .
First thing first get the economy / manufacturing back on track then the nation can start looking to pay down the national debt with a long term plan passed by congress and made a law .


#8

To do that…we will need to cut entitlement spending. Just the way it is.


#9

The nation will never pay down the debt unless CONGRESS cuts spending signed sealed delivered by a president.

And yes, it will likely include tax increases and expanding the number of people paying Federal Income taxes.

Isn’t payback hell.


#10

There will be less use of what you joking call entitlement with closed boarders and full employment .
We can increase the medicare tax rate to cover all the citizens now included in the plan .
Social Security is a stand alone pension self funded and can easily be adjusted to meet the demands of future customers .


#11

The last surpluses we had as a nation was around twenty years ago .
Attempting to pay it down overnight would be painful and disrupt our current growth .
Its a sad fact that much of the debt was wasted on the war in Iraq and bailing out bankers that were never prosecuted and to add insult allowed to deduct the billions of dollars in fines screwing the taxpayers all over again .
The nation must arrest to cost of health care and drugs some how and then come up with a long term plan that allows the slow paying off the the debt .
Keeping America a good choice for business and their employees .


#12

The Clinton surplus was not really a surplus as it used the massive SS surpluses of the time to offset government spending.

The debt cannot be paid back over night, it’s impossible with a 21 trillion nut to crack and the first step must e cutting spending which means addressing all government spending. SS/Medicare/ ACA, welfare, everything across the board. At this point, a special outside group should be hired, appointed to review every department in government and eliminate waste, consolidate to eliminate duplication. The use it or lose it government spending must end. The way government spends our money must change.

It all begins with step 1. Yes some people will be hurt however the party is near over and a little hurt today may offset the damage doing nothing will certainly cause tomorrow.


#13

I like everyone have no problem with a little pain as long as someone else is feeling the pain !
The working class has carried the pain of wars , free trade and open boards .
The rich have been the beneficiary’s of war’s they never took part in free trade they made boat loads of money from open borders they exploited American workers by depressing wages and illegal aliens by exploiting their inability to protest dangerous working conditions the use of child labor and citys and states the cost of supporting these peolpe .


#14

And that is subjective as there’s certainly no concens on “the right thing”.


#15

Then you should support regulations.


#16

Why should I support regulations ?


#17

Unless you are saving money .


#18

Well if this bothers you:

“The rich have been the beneficiary’s of war’s they never took part in free trade they made boat loads of money from open borders they exploited American workers by depressing wages and illegal aliens by exploiting their inability to protest dangerous working conditions the use of child labor and citys and states the cost of supporting these people.”

Then you should support regulation, shrug.


#19

No regulation would fix any of the issues .
Laws and a revamp of our tax system top to bottom .


#20

Laws are precisely how we regulate against the abuses you site. :roll_eyes: