After weeks of market volatility and calls by President Donald Trump
for the Federal Reserve to stop raising interest rates, the U.S. central
bank instead did it again, and stuck by a plan to keep withdrawing
support from an economy it views as strong.
Wednesday's rate increase, the fourth of the year, pushed the central bank's key overnight lending rate to a range of 2.25 percent to 2.50 percent.
Read more: - by Ann Saphir and Howard SchneiderFed raises interest rates, signals more hikes ahead
U.S.
stocks and bond yields fell hard. With the Fed signaling "some further
gradual" rate hikes and no break from cutting its massive bond
portfolio, traders fretted that policymakers could choke off economic
growth.
"Maybe
they have already committed their policy error," said Fritz Folts,
chief investment strategist at 3Edge Asset Management. "We would be in
the camp that they have already raised rates too much."
Interest rate futures show traders are currently betting the Fed won't raise rates at all next year.
Wednesday's rate increase, the fourth of the year, pushed the central bank's key overnight lending rate to a range of 2.25 percent to 2.50 percent.
Note EU-Digest: " In New York, U.S. S&P 500 Index lost 1.54 percent to hit its lowest
level since September 2017. U.S. stocks are on pace for their biggest
December decline since 1931, the depths of the Great Depression ".
Read more: - by Ann Saphir and Howard SchneiderFed raises interest rates, signals more hikes ahead
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