Fed raises key rate and sees possible acceleration in hikes

Fed raises interest rates and signals faster hikes on the way

And a majority of policy makers said they now expect a total of four interest rate increases this year.

As expected, policymakers at the central bank hiked the benchmark federal funds rate by a quarter percentage point.

"Recent data suggest that growth of household spending has picked up, while business fixed investment has continued to grow strongly", the Fed wrote in its statement Wednesday announcing the interest rate hike.

The Fed move came after a two-day meeting where its members discussed the robust state of the U.S. economy and the potential impact of a trade war amid rising tension between the USA and its largest trading partners. He'll likely address the decision to hike rates and the Fed's views on the overall economic outlook. Unemployment is 3.8%, the lowest since 2000, and inflation is creeping higher. After keeping interest rates low for years to boost growth, the central bank is now moving rates back to what economists say is a neutral position.

Following the Fed's rate decision, the FOMC releases its statement regarding monetary policy. For 2020, the Fed foresees a median rate of 3.4 percent.

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Fed says economic activity rising at a solid rate, previously described growth as moderate. The unemployment rate is seen falling to 3.6 percent in 2018, compared to the 3.8 percent forecast in March.

The Fed's twin mandate is to bolster employment while controlling inflation, and in the current environment more rate rises appear inevitable.

The Fed's pace of rate hikes for the rest of the year could end up reflecting a tug of war between a sturdy economy and the risks to growth, including from a potential trade war that could break out between the United States and such key trading partners as China, the European Union, Canada and Mexico.

In a technical move, the central bank also chose to set the interest rate it pays banks on excess reserves - its chief tool for moderating short-term interest rates - at just below the upper level of its target range.

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