The Federal Reserve’s latest move is bad news for borrowers hit with multiple rate hikes this year.
Policymakers ended a two-day meeting Wednesday by voting to raise the central bank’s benchmark interest rate to a range of 2.25 to 2.5 percent. This is the fourth rate hike of 2018 and the ninth increase since the Fed began raising rates from near-zero three years ago.
In addition to boosting the federal funds rate, the central bank provided updated economic projections. Their insights suggest that there could be fewer rate hikes next year than originally anticipated. Most members of the Federal Open Market Committee (FOMC) predict that there will be two rate hikes in 2019 rather than the three projected in September.
“We saw the final rate hike of 2018 today, and maybe the final one for a little while,” says Greg McBride, CFA, Bankrate’s chief financial analyst. “The Fed downshifted their projections of 2019 economic growth, inflation, and interest rate hikes – not in a big way but enough to remove the urgency of repeated rate hikes.”
By: Amanda Dixon, Bankrate