The Federal Reserve raised its key overnight interest rate by a quarter percentage point (25 basis points) on Sept. 21 and signaled more rate hikes are likely in coming months.
The Fed raised its Federal Funds rate to 1.75 percent from 1.50 percent, the third straight meeting with a quarter-point rate hike. In the accompanying statement, the Fed said the economy “appears to have regained some traction, and labor market conditions have improved modestly.”
The Fed said that in spite of the rise in energy prices, “inflation expectations have eased in recent months.”
The vote to raise the Federal Funds rate by a quarter point was unanimous. The Fed also raised the discount rate by 25 basis points to 2.75 percent. Higher interest rates tend to support a currency by making returns on deposits more attractive to global investors.
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