The Federal Reserve raised interest rates on Wednesday to between 2 and 2.5 percent, a move that is expected to push up the cost of borrowing for commercial and residential loans.
The Fed noted that inflation has remained near its 2 percent objective. It expects to gradually raise interest rates “consistent with sustained expansion of economic activity, strong labor market conditions,” and inflation.
Interest rate hikes have sped up under Chairman Jerome Powell in response to a robust economy, which will help curb inflation.
The Fed also released economic projections on Wednesday. It raised its projected gross domestic product growth for this year to 3.1 percent from the 2.8 percent it projected in June. It also raised its projection for growth in 2019 to 2.5 percent from 2.4 percent. It also expects the unemployment rate to drop from a projected 3.7 percent this year to 3.5 percent next year.
President Donald Trump said he was “not thrilled” with the rising rates last month during a fundraiser at developer Howard Lorber’s Southampton mansion.
The Fed was expected to raise rates three times this year, but earlier this year signaled there will be four hikes, which means another is likely coming by the end of December.