Federal Reserve hikes key interest rate from 1.5% to 1.75%, highest since 2008

  • 6 years ago
We start this morning with the Federal Reserve's decision to hike U.S. rates to their highest level in a decade.
The move is the Fed's first major decision under its new chairman Jerome Powell.
For more on the hike and the impact it could have, Lee Seung-jae reports.

In the U.S. central bank's first major decision under its new Chairman Jerome Powell on Wednesday,.... the Federal Reserve hiked its key interest rate from one-point-five percent to one-point-seven-five percent,... the highest level since 2008.
It was the sixth rate increase since the Federal Open Market Committee began raising rates off near zero in December 2015.
The move was widely expected as the U.S. economy continues to strengthen and Wall Street remains near record highs.

" The job market remains strong, the economy continues to expand, and the inflation appears to be moving toward the FOMC's 2 percent longer-run goal."

In addition,... three rate hikes are anticipated for this year,... but the Fed will pick up the pace even further in 2019.
The Federal Reserve also significantly boosted its forecast for U.S. growth for 2018 and 2019.
It says the U.S. economy is on pace to expand two-point-seven percent this year,... and two-point-four percent the following year.
The growth, according to Fed officials, will help lower the unemployment rate in the U.S.
The jobless rate is expected to fall from four-point-one percent to three-point-eight percent this year,... and to three-point-six percent in 2019,... which would be the lowest level since 1969.
The Fed's move also means U.S. rates will be higher than South Korea's for the first time in more than ten years.
The Bank of Korea currently has the nation's benchmark interest rate at one-point-five percent.
Speaking on Wednesday at his confirmation hearing for a second term as BOK governor,... Lee Ju-yeol said the country could face serious problems if the gap between the two widens too much.
Lee added that, if Korea raises rates to stay on par with the U.S., it could cause major issues in a country where households are saddled with a record one-point-three trillion U.S. dollars of household debt as of last year.
With the Federal Reserve gearing up for three more rate hikes before the year is out, global market analysts are closely monitoring their impact on the fragile global economy recovery.
Lee Seung-jae, Arirang News.