Federal Reserve, buoyed by stronger economy, lifts rates again

The Federal Reserve on Wednesday raised interest rates one notch higher as the U.S. economy continues to get healthie...

Posted: Dec 14, 2017 12:28 AM
Updated: Dec 14, 2017 12:28 AM

The Federal Reserve on Wednesday raised interest rates one notch higher as the U.S. economy continues to get healthier.

The rate hike, which was widely expected, was the third this year.

Policy makers pointed to the lower number of unemployed workers, increased spending by households, and bigger investments by businesses in recent quarters.

"The labor market has continued to strengthen and ... economic activity has been rising at a solid rate," the Federal Open Market Committee said in a statement following its two-day meeting.

The federal funds rate, which helps determine rates for mortgages, credit cards and other borrowing, will now hover in a range of 1.25% to 1.5%. Overall, rates are still historically low.

Related: Tax cuts could make it harder to fight the next recession

Two Fed officials dissented on the decision: Chicago Fed President Charles Evans and Minneapolis Fed President Neel Kashkari, who felt policy makers should wait longer before raising rates again.

This is the fifth time the Fed has lifted interest rates since the 2008 financial crisis. Policy makers plan to raise rates three more times in 2018, and then twice in 2019.

Central bankers, under the leadership of outgoing Fed chair Janet Yellen, have moved patiently to maintain economic growth at a steady pace. They have kept a watchful eye on inflation, which has run below expectations.

President Trump nominated Fed governor Jerome Powell in November to take over when Yellen ends her four-year term on February 3. It's largely expected that Powell will stick to a playbook similar to that of his predecessor, who was named to the post by former President Obama. Yellen was the first woman to serve in the role.

Related: America's wealth gap is bigger than ever

Top Fed officials have been mystified about why inflation, which reflects the prices of everything from meat and cheese to houses and cars, has fallen short of the Fed's goal of 2%. That's what the Fed considers healthy for the economy.

In deciding to slowly raise rates over the past year or so, the Fed has weighed competing forces. Stubbornly low inflation and consumer prices suggested the Fed should hold off on raising rates. But steady economic growth and low unemployment suggested it should act.

Yellen has described inflation as something of a "mystery" but has signaled she expects it will stabilize over time.

Related: Tax overhaul could mean major changes to your paycheck

It's the job of central bankers to shift policy levers, nudging interest rates higher and lower, to boost jobs and keep prices, or inflation, at the optimal level. That means not too high, and not too low.

When inflation is too low, it can hurt the economy. Businesses get queasy about investing in people and equipment. If prices don't rise, wages don't either.

Some Fed officials have warned against raising interest rates until inflation meets its target.

On Wednesday, the Fed said it continues to expect inflation to remain below its target, at 1.7%, and the unemployment rate to be 4.1%, based on its updated economic projections.

Policy makers raised their expectations for economic growth in 2018. The central bank now expects the economy to grow at a slightly faster rate of 2.5%, compared with a previous forecast of 2.4%.

Mississippi Coronavirus Cases

Data is updated nightly.

Cases: 245847

Reported Deaths: 5356
CountyCasesDeaths
DeSoto16717168
Hinds15748310
Harrison12806188
Rankin10334204
Jackson9996172
Lee8666135
Madison7994158
Jones6112108
Forrest5826117
Lauderdale5672174
Lowndes5186106
Lafayette482792
Lamar471162
Washington4700122
Bolivar3915105
Oktibbeha384279
Panola357274
Pontotoc356552
Monroe3463101
Union334755
Warren334692
Marshall333264
Neshoba3310149
Pearl River313891
Leflore2969104
Lincoln290185
Sunflower275868
Tate264759
Alcorn257850
Itawamba257058
Pike254876
Hancock246957
Prentiss240047
Scott238743
Copiah235649
Yazoo235054
Tippah233845
Simpson230166
Leake226764
Coahoma219054
Grenada213970
Covington207171
Marion203371
Adams200065
Winston196260
George195937
Wayne193029
Attala190958
Newton185142
Chickasaw179943
Tishomingo179059
Holmes167467
Jasper163533
Clay155632
Stone138818
Tallahatchie137033
Clarke135160
Calhoun132021
Smith117322
Yalobusha112534
Walthall110536
Noxubee108922
Greene108229
Montgomery107134
Carroll102320
Lawrence99817
Perry98631
Amite95725
Webster90024
Claiborne84125
Tunica84021
Jefferson Davis82925
Humphreys80324
Benton79722
Kemper75620
Quitman6678
Franklin64613
Choctaw59412
Wilkinson57424
Jefferson52019
Sharkey42317
Issaquena1576
Unassigned00

Alabama Coronavirus Cases

Cases: 414583

Reported Deaths: 5945
CountyCasesDeaths
Jefferson60842887
Mobile29590538
Madison26466183
Tuscaloosa20537267
Montgomery18562304
Shelby18181112
Baldwin15841177
Lee1212097
Morgan12002112
Etowah11488142
Calhoun10863197
Marshall10048106
Houston8405123
Cullman792294
Limestone785073
Elmore7670101
DeKalb757282
St. Clair7417120
Lauderdale740282
Talladega6036108
Walker5834176
Jackson571937
Colbert522270
Blount521980
Autauga507555
Coffee431456
Dale388278
Franklin362145
Chilton332965
Covington325567
Russell318910
Escambia309842
Dallas297988
Chambers275769
Clarke272933
Tallapoosa2591107
Pike245829
Lawrence239345
Marion238649
Winston222535
Bibb211347
Geneva196331
Marengo196329
Pickens195331
Hale172542
Barbour169636
Butler166958
Fayette164026
Cherokee158330
Henry149219
Monroe143617
Randolph137635
Washington135426
Clay124446
Crenshaw117444
Lamar116819
Cleburne115123
Macon111935
Lowndes107935
Wilcox99921
Bullock97128
Perry95019
Conecuh92820
Sumter89126
Greene75123
Coosa59814
Choctaw50824
Out of AL00
Unassigned00
Tupelo
Partly Cloudy
50° wxIcon
Hi: 51° Lo: 33°
Feels Like: 50°
Columbus
Partly Cloudy
50° wxIcon
Hi: 53° Lo: 34°
Feels Like: 50°
Oxford
Mostly Cloudy
45° wxIcon
Hi: 48° Lo: 31°
Feels Like: 38°
Starkville
Partly Cloudy
50° wxIcon
Hi: 53° Lo: 33°
Feels Like: 50°
WTVA Radar
WTVA Temperatures
WTVA Severe Weather