The US Federal Reserve (Fed) has raised its key interest rate for second time this year. The interest rate at which banks lend each or money increases by 0.25 points to a margin of 1.75 to 2 percent, Fed shared after a meeting of its interest rate policy Committee. Last it had 2008 and thus before climax of world financial crisis a two before comma given.
In March, US Federal Reserve also increased interest rates, 2017 Federal Reserve has raised interest rates three times. She furr signalled that re could be two furr interest rate hikes in 2018. So far, a total of three interest rate steps had been discussed this year.
Since Fed began to normalise its monetary policy in wake of financial crisis, at end of 2015, interest rate level has now risen by 0.25 percentage points by seven times. The Federal Reserve is thus heading a much tighter course than European Central Bank, whose key interest rate for euro area is still at zero percent.
The central bank responds to continuing economic upturn, which was furr driven by US President Donald Trump's radical tax reform. Moreover, labour market situation is good. Despite trade dispute and rising government debt ratio, American economy is booming and unemployment rate has lasted at 3.8 percent – as low as it has been for 18 years. With eighth, costs for money that banks borrow overnight are rising first. As a result, loans to businesses and consumers tend to be more expensive.