At its meeting today, the Federal Open Market Committee (FOMC) unanimously voted to raise the target range for the federal funds rate to 1.75 to 2.0 percent. It was the second hike this year. The committee signaled two more increases this year as inflation rises and the unemployment rate drifts lower.
Committee members expect “that further gradual increases in the target range for the federal funds rate will be consistent with sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee’s symmetric 2 percent objective over the medium term.”
The Committee’s revised economic projections raised the forecast for 2018 GDP growth from 2.7 to 2.8 percent. Additionally, they lowered the projected year-end unemployment rate from 3.8 to 3.6 percent.