AFP, WASHINGTONThe US Federal Reserve on Wednesday raised the key lending rate for the first time this year to its highest level in a decade, citing a stronger outlook for US economic growth. The US dollar extended losses in Asia yesterday after the Fed stuck to its target for interest rate hikes this year, but fresh fears of a trade war hit equity markets as US President Donald Trump prepared fresh sanctions on China. Yet, Powell told reporters that even with rising interest rates, the world’s largest economy is “healthier than it has been since before the financial crisis. In its quarterly forecasts, Fed officials project that the benchmark interest rate would end this year at 2.1 percent, meaning two more hikes are likely, unchanged from the December forecast, but would rise to 2.9 percent at the close of next year, implying three increases. That would mean one more rate increase next year than previously expected, even though officials do not anticipate inflation to rise any faster.

Source: Taipei Times March 22, 2018 15:56 UTC