Federal Reserve resumes meeting on historic rate hike

Dollar Stock and money. Photo: investing-for-the-future

Dollar Stock and money. Photo: investing-for-the-future

The Federal Reserve resumed meeting Wednesday to discuss raising interest rates for the first time since 2006 to end its long crisis stance in monetary policy.

The Fed is expected to announce at 2:00 pm (1900 GMT) that it is hiking the benchmark federal funds rate by a quarter point to 0.25-0.50 percent, after keeping it next to zero for seven years.

The move, which the Fed has signaled for months, would represent the central bank’s confidence in the US economic outlook and also kick off a likely slow series of rate hikes to “normalize” central bank policy over the next two years.

That ultimately will mean raising the cost of borrowing for everyone from foreign governments and companies to home and car buyers, while also better rewarding savers on their bank accounts.

A Fed rate increase “is a positive sign for the US economy — to be welcomed, not feared,” said Stuart Hoffman, chief economist at PNC Financial Services Group.

Well-warned ahead of time, global share markets surged Wednesday ahead of the rate decision, with Tokyo stocks up 2.6 percent, the Euro Stoxx 50 blue-chip index adding 0.9 percent and US stock markets expected to open higher.

The dollar meanwhile was little-changed at $1.0934 to the euro and 121.88 yen.

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  • amador kester

    Since the cyclical banking collapse eight years ago the west had used quantitative easing to print trillions of dollars of mere paper currency not backed up by any gold standard.. Usa, britain and some other nations employ this mechanism to bulldoze their way through. One of these super economies of the west may not have up to half a trillion of real currency backed up by gold standard.The result is a buccaneering global economy in a race with time.They did peg their interest rates at one percent and its better to watch and see what their policies will eventually amount to from the global perspectives

  • honesty NO1

    May be the Shylock investors in the housing market will now be ready for the correction the government prevented for 7 years

  • Pastor Chris Allu

    This is an ill-omen for Nigeria from our biggest trade partner..the US.Naira will weaken further,external reserves threatened,manufacturing capacity utilisation will decline,unemployment will worsen.The “change” mantra will change.Enemies at home,enemies abroad.NIGERIA PRAY !!!