The U.S. Federal Reserve Raises Interest Rates by 25 Basis Points
The U.S. Federal Reserve raised the interest rate by 25 basis points, from 3.75% to 4%.
The Federal Reserve voted unanimously to raise interest rates.
The following points summarize the remarks made by Kevin Warsh at the press conference:
- The decision to raise interest rates comes at a time when the economy is in the process of recovering.
- We find it difficult to describe financial conditions as restrictive.
- The Federal Reserve’s primary focus is on price stability.
- The Federal Reserve must be confident that inflation is moving toward our 2% target.
- Inflation has been too high for too long, and we are not satisfied with the current pace of inflation.
- Inflation readings over the summer do not point to a significant improvement in underlying price trends.
- The decision was decisive and unanimous; the economy has strengthened over the past seven weeks, and we have reached full employment.
- Warsh says the Fed has clear goals, which are:
1. To achieve maximum employment
2. To maintain price stability
3. To support a thriving U.S. economy that serves as a model for the world
We expect the U.S. dollar to rise further and gold prices to fall following the rate hike decision and Warsh’s remarks
