Fed Raises Interest Rates Again As Economy Rolls On : The Two-Way Policymakers increased a key rate for the third time this year. The quarter-point move indicates the Fed is confident in the economy as it continues to recover from the financial crisis.
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Fed Raises Interest Rates Again As Economy Rolls On

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Fed Raises Interest Rates Again As Economy Rolls On

Fed Raises Interest Rates Again As Economy Rolls On

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ROBERT SIEGEL, HOST:

Federal Reserve officials announced today another quarter-point hike in their official interest rate. That'll put upward pressure on interest rates throughout the economy, affecting consumers and businesses. NPR's John Ydstie reports.

JOHN YDSTIE, BYLINE: This is the fifth rate hike since the Fed began raising rates late in 2015. That was after holding their official rate near zero for seven years to help the economy recover from the financial crisis. Today's hike will put the benchmark federal fund's rate in a range between 1 and a quarter and 1 and a half percent. Updated forecasts released by the Fed today show officials expect slightly faster growth next year. Speaking at her post-meeting news conference, Fed Chair Janet Yellen said that was largely due to the expected stimulus from the GOP tax cut pending in Congress.

(SOUNDBITE OF PRESS CONFERENCE)

JANET YELLEN: I think my colleagues and I are in line with the general expectation among most economists that the type of tax changes that are likely to be enacted would tend to provide some modest lift to GDP growth in the coming years.

YDSTIE: Yellen said the Fed would welcome an uptick in growth from the tax plan. But she also said she is personally concerned about projections that the tax bill could add a trillion dollars or more to the national debt over 10 years.

(SOUNDBITE OF PRESS CONFERENCE)

YELLEN: The addition to the debt, taking what is already a significant problem and making it worse is - it is of concern to me.

YDSTIE: Yellen said it could hinder Congress' ability to effectively respond to future downturns in the economy with added spending. Yellen was also asked whether the Fed is concerned about the stock market boom that sent stocks to record levels. She says it's obvious stock prices are elevated, but that doesn't necessarily mean they're overvalued.

(SOUNDBITE OF PRESS CONFERENCE)

YELLEN: We're enjoying solid economic growth with low inflation. And the risks in the global economy look more balanced than they have in many years.

YDSTIE: So, Yellen said, the booming stock market is not at the top of the Fed's list of concerns. This was Yellen's last scheduled news conference as Fed chair, and she reflected on her long experience at the Fed, including the past four years as its chair.

(SOUNDBITE OF PRESS CONFERENCE)

YELLEN: It's been an immensely rewarding experience for me. I feel very positive about what we've been able to accomplish.

YDSTIE: Yellen specifically noted the great improvement in the labor market under her watch that has pushed the unemployment rate to 4.1 percent, its lowest level in 17 years. Yellen also expressed confidence that her successor, Jerome Powell, is very capable of steering the Fed in the years ahead. John Ydstie, NPR News, Washington.

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