The U.S. Fed hiked interest rates yesterday though its rate prospects for the following years remain the same notwithstanding the projected short-lived leap in economic expansion thanks to the initiative of president Trump and its administration to cut taxes.
The awaited fiscal stimulus, taking place right after a barrage of quite upbeat data, made it possible for the US central bank to hike rates to the level of 1.25-1.50%, which is one fourth of a percentage point. Meanwhile it’s the third instance of raising rates in 2017.
However the Federal Reserve’s projected other three rate hikes in the following two years remained without changes from the September plans, which means the tax overhauls discussed in the Congress would have a minimal and short-term impact.
The raised rate signified a win for the central bank that has had difficulties from time to time with living up to the promised level of monetary tightening. Another thing is that it enabled Fed’s Janet Yellen, ahead of the end of her time in office, to send a message of recovery of the US economy, after 10 years since the beginning of 2007-2009 recession.