Cedar Rapids, IA, USA  
Digital Edition Digital Edition
Log in Log In My Account My Account
Subscribe Today
The Gazette The Gazette
The Gazette The Gazette
  • COVID-19
  • News
  • Sports
  • Opinion
  • Food and Drink
  • Business
Digital Edition Digital Edition
Log in Log In My Account My Account
Subscribe
CLOSE
The Gazette
Subscribe
My Account
  • News
    • All News
    • Election 2020
    • Coronavirus
    • Business News
    • Community
    • Crime and Courts
    • Education
    • Government
    • Health
    • Nation and World
    • Time Machine
    • Search Archive

    Our Journalists

    • Rod Boshart
    • Lee Hermiston
    • Erin Jordan
    • James Q. Lynch
    • Trish Mehaffey
    • Vanessa Miller
    • Kat Russell
    • Grace King
    • John Steppe
    • Gage Miskimen
    • Marissa Payne
  • Sports
    • All Sports
    • Iowa Hawkeyes
    • Hawkeye Football
    • Hawkeye Basketball
    • Prep Sports
    • Prep Volleyball
    • Prep Football
    • Prep Basketball
    • Prep Wrestling
    • Iowa State Cyclones
    • UNI Panthers
    • Small College Sports
    • Minor League Sports
    • Outdoors

    Sports Desk

    • Mike Hlas
    • Jeff Johnson
    • Jeff Linder
    • J.R. Ogden
    • K.J. Pilcher
    • Leah Vann
  • Opinion
    • All Opinion
    • Editorial Mission
    • Guest Columnists
    • Letters to the Editor
    • Political Cartoons
    • Staff Columnists
    • Staff Editorials
    • Submit a Letter or Column

    Our Columnists

    • Todd Dorman
    • Adam Sullivan
  • Food and Drink
    • All Food and Drink
    • Chew on This
    • Recipes
    • Restaurants
  • Business
    • All Business
    • Agriculture
    • Business Notes
    • Companies
    • Personal Finance
    • Economy
    • Employment
    • Energy
    • Manufacturing
    • Openings & Closures
    • Real Estate
    • Retail
    • Small Business
    • Transportation

    Our Journalists

    • Rod Boshart
    • Erin Jordan
    • John Steppe
  • Obituaries
    • All Obituaries
    • In Memory Of
    • Submit an Obituary
  • Podcasts
    • All Podcasts
    • Daily News Podcast
    • Fact Checker
    • Hlastradamus Odds
    • Iowa Prep Sports
    • On Iowa
    • On Iowa Politics
    • On UNI
    • Pinning Combination
  • Entertainment
    • All Entertainment
    • Art
    • Books
    • Museums & Galleries
    • Music
    • Theater
    • Things To Do
  • Living
    • All Living
    • Health & Wellness
    • Home & Garden
    • Milestones
    • People & Places
    • Pets & Animals
    • Recreation
    • Religion & Belief
    • Travel

    Our Writers

    • Diana Nollen
  • Kids Gazette
    • See All
    • Kids Cooking Series
    • Kids Galleries
    • Printables
    • Activities
    • Articles
    • Submissions
    • Resources
  • Photos
    • All Photos and Videos
    • The Iowa Photo
    • Photo Store

    Our Photojournalists

    • Andy Abeyta
    • Liz Martin
    • Rebecca Miller
    • Jim Slosiarek
    • Gazette Visuals
  • Milestones
    • All Milestones
    • Anniversaries
    • Days To Remember
    • Engagements
    • Holidays
    • In Remembrance
    • New Arrivals
    • Thank Yous
    • Submit a Milestone
  • Data
    • Arrests
    • Building Permits
    • Interactive Maps & Charts
    • Salaries
  • Gazette Sites
    • Classifieds
    • Corridor Careers
    • Garage Sales
    • Gazette Gives Back
    • Gazette Rewards
    • Gazette Store
    • Green Gazette
    • HER
    • Iowa Wedding Experience
    • Holiday Light Finder
    • Hoopla
    • Iowa Ideas
    • Photo Store
  • Special Events
  • Special Sections
  • Other
    • About The Gazette
    • Archives
    • Article Removal
    • Business Directory
    • CR Arrest Database
    • Mobile Apps
    • Customer Care
    • Order Back Issues
    • Privacy Policies
    • Puzzle Answers
    • Sponsorship Requests
    • Submit a Letter
    • Weather
  • Digital Edition
Daily News PodcastDaily News Podcast
Daily NewslettersDaily Newsletters
Log out

FOLLOW US

The Gazette
  • News
  • Sports
  • Opinion
  • Food and Drink
  • Business
  • Obituaries
  • Podcasts
  • Entertainment
  • Living
  • Kids Gazette
  • Photos
  • Milestones
  • Data
  • Gazette Sites
  • Special Events
  • Special Sections
  • Other
  • Digital Edition
  • All News
  • Election 2020
  • Coronavirus
  • Business News
  • Community
  • Crime and Courts
  • Education
  • Government
  • Health
  • Nation and World
  • Time Machine
  • Search Archive

Our Journalists

  • Rod Boshart
  • Lee Hermiston
  • Erin Jordan
  • James Q. Lynch
  • Trish Mehaffey
  • Vanessa Miller
  • Kat Russell
  • Grace King
  • John Steppe
  • Gage Miskimen
  • Marissa Payne
  • All Sports
  • Iowa Hawkeyes
  • Hawkeye Football
  • Hawkeye Basketball
  • Prep Sports
  • Prep Volleyball
  • Prep Football
  • Prep Basketball
  • Prep Wrestling
  • Iowa State Cyclones
  • UNI Panthers
  • Small College Sports
  • Minor League Sports
  • Outdoors

Sports Desk

  • Mike Hlas
  • Jeff Johnson
  • Jeff Linder
  • J.R. Ogden
  • K.J. Pilcher
  • Leah Vann
  • All Opinion
  • Editorial Mission
  • Guest Columnists
  • Letters to the Editor
  • Political Cartoons
  • Staff Columnists
  • Staff Editorials
  • Submit a Letter or Column

Our Columnists

  • Todd Dorman
  • Adam Sullivan
  • All Food and Drink
  • Chew on This
  • Recipes
  • Restaurants
  • All Business
  • Agriculture
  • Business Notes
  • Companies
  • Personal Finance
  • Economy
  • Employment
  • Energy
  • Manufacturing
  • Openings & Closures
  • Real Estate
  • Retail
  • Small Business
  • Transportation

Our Journalists

  • Rod Boshart
  • Erin Jordan
  • John Steppe
  • All Obituaries
  • In Memory Of
  • Submit an Obituary
  • All Podcasts
  • Daily News Podcast
  • Fact Checker
  • Hlastradamus Odds
  • Iowa Prep Sports
  • On Iowa
  • On Iowa Politics
  • On UNI
  • Pinning Combination
  • All Entertainment
  • Art
  • Books
  • Museums & Galleries
  • Music
  • Theater
  • Things To Do
  • All Living
  • Health & Wellness
  • Home & Garden
  • Milestones
  • People & Places
  • Pets & Animals
  • Recreation
  • Religion & Belief
  • Travel

Our Writers

  • Diana Nollen
  • See All
  • Kids Cooking Series
  • Kids Galleries
  • Printables
  • Activities
  • Articles
  • Submissions
  • Resources
  • All Photos and Videos
  • The Iowa Photo
  • Photo Store

Our Photojournalists

  • Andy Abeyta
  • Liz Martin
  • Rebecca Miller
  • Jim Slosiarek
  • Gazette Visuals
  • All Milestones
  • Anniversaries
  • Days To Remember
  • Engagements
  • Holidays
  • In Remembrance
  • New Arrivals
  • Thank Yous
  • Submit a Milestone
  • Arrests
  • Building Permits
  • Interactive Maps & Charts
  • Salaries
  • Classifieds
  • Corridor Careers
  • Garage Sales
  • Gazette Gives Back
  • Gazette Rewards
  • Gazette Store
  • Green Gazette
  • HER
  • Iowa Wedding Experience
  • Holiday Light Finder
  • Hoopla
  • Iowa Ideas
  • Photo Store
  • About The Gazette
  • Archives
  • Article Removal
  • Business Directory
  • CR Arrest Database
  • Mobile Apps
  • Customer Care
  • Order Back Issues
  • Privacy Policies
  • Puzzle Answers
  • Sponsorship Requests
  • Submit a Letter
  • Weather
Daily News PodcastDaily News Podcast Daily NewslettersDaily Newsletters
LOG OUT

FOLLOW US

More Stories

University of Iowa medical expert takes questions on J &…

Iowa orders pause on Johnson & Johnson vaccine

Marion school board votes 5-2 to no longer consider ’Mavericks’

Cedar Rapids clinic to receive federal COVID-19 allocation starting this…

Public funeral in Independence planned Friday for slain Iowa trooper…

'A way to start over again’: Collaboration aims to replant…

House GOP calls for freezing funding for ‘bloated’ regents universities

Ernst bill bans meat bans

Home / News

Federal Reserve hikes interest rates

Washington Post Dec. 14, 2016 1:38 pm Updated: Dec. 14, 2016 1:38 pm
Federal Reserve hikes interest rates

WASHINGTON - The Federal Reserve raised interest rates on Wednesday afternoon for the first time in a year, and it signaled that rates could continue to rise next year more quickly than officials had previously expected.

The increase was unanimous and modest, raising the Fed's key interest rate by a quarter point, from a range of 0.25 to 0.5 percent to a range of 0.5 to 0.75 percent. It reflects Fed officials' confidence in the strength of the U.S. economy and what officials see as budding signs of higher inflation.

The decision came 'In view of realized and expected labor market conditions and inflation,” members of the Federal Open Market Committee said in a statement. At two instances in the statement, committee members hinted that inflation is picking up, though still below the central bank's target rate.

Economic projections also released by the Fed indicate that Federal Reserve Board members and regional bank presidents have brightened their forecasts for 2016 and 2017 economic growth slightly, compared to their last projections in September. The group now expects the economy to grow 1.9 percent in 2016 and 2.1 percent in 2017.

The projections also show that the group expects the Fed to increase rates three times in 2017, to a rate of 1.4 percent by year's end. The September projections signaled only two expected hikes next year.

Despite those changes, the statement gave no indication that officials are bracing for bursts of increased growth or inflation stimulated by the tax cuts and spending measures that President-elect Donald Trump has promised to enact once he takes office. Analysts have warned that if Trump and Congress agree to slash tax rates and increase spending, in areas such as infrastructure, the Fed could be forced to raise rates faster than expected in order to counter rising prices in the economy.

Much of the official statement was unchanged from November, when the Fed declined to raise rates in order 'to wait for some further evidence of continued progress” toward maximum employment in the economy and a target inflation rate of 2 percent. Officials said Wednesday, as they said a month ago, that 'near-term risks to the economic outlook appear roughly balanced” - meaning growth is as likely to speed up as it is to slow down.

Fed officials now judge the overall inflation rate to be 1.5 percent, up from 1.3 percent in September, but still well below target. They judge core inflation, which excludes volatile commodities such as gasoline prices, to be 1.7 percent.

In the statement, officials said 'inflation has increased since earlier this year,” a change from November, when the statement said 'inflation has increased somewhat since earlier this year.” Officials also said measures of inflation compensation 'have moved up considerably but remain low”; last month, the word 'considerably” did not appear in that line.

The November and September meeting statements both pointed toward a likely December rate hike. Economic forecasters and financial traders have largely based their outlooks for monetary policy next year on the assumption that the central bank would follow through.

The central bank last raised rates at its December meeting a year ago, its first step to move the Fed from what economists call the zero-lower bound - meaning interest rates hovering around zero percent.

The questions facing Fed Chair Janet L. Yellen at her news conference Wednesday afternoon, following the conclusion of the two-day meeting of the open market committee, will likely focus on the outlook for future hikes and the Fed's expectations for economic performance under the new administration.

Trump has promised to cut taxes for individuals and corporations and to boost infrastructure spending by as much as $1 trillion through tax credits his team says will pay for themselves.

Analysts did not expect Fed officials to change their forecasts of future increases this month based on an expectation of what Trump - who criticized Yellen on the campaign trail - and Congress might do.

'We very much doubt that FOMC members want to be accused of seeking to influence Congress and the new administration,” analysts at Pantheon Macroeconomics wrote this week, 'given how unpopular the Fed is already with Republican politicians.”

A man walks past the Federal Reserve Bank in Washington, D.C., U.S. December 16, 2015. (REUTERS/Kevin Lamarque/File Photo)

Trending

  • University of Iowa presidential finalist Osofsky tackles questions of free…

    Vanessa Miller

  • Gazette Daily News Podcast, April 13

    Stephen Schmidt

  • Iowa City man faces life in prison for sexually abusing…

    Trish Mehaffey

  • Are aliens real? A lot of evidence has come out…

    Michaela Ramm

  • A track program, then a track ... and now, a…

    Jeff Linder

Give us feedback

We work hard to provide fair, accurate coverage because we value your trust. If you find an error or omission in our reporting, please tell us here.

Submit a story idea

Do you have a story idea that we should look into? Please tell us here.

Related Stories

Holiday retail forecast: More sales, more hiring

Holiday retail forecast: More sales, more hiring

Detroit Free Press News Oct. 17, 2017 1:10 pm

Federal Reserve hikes interest rates

Federal Reserve hikes interest rates

Washington Post News Dec. 14, 2016 1:38 pm

New Eastern Iowa grocery stores risk market saturation

New Eastern Iowa grocery stores risk market saturation

Erin Jordan News Dec. 17, 2016 8:11 am

News

Ernst bill bans meat bans

Ernst bill bans meat bans

Erin Murphy

Agriculture News 28m ago

Iowa City schools relaxing coronavirus quarantine practices after almost 1,000…

Iowa City schools relaxing coronavirus quarantine practices after almost 1,000…

Grace King

K-12 Education 53m ago

Iowa Senate wants Department of Public Safety cold case unit

Iowa Senate wants Department of Public Safety cold case unit

Rod Boshart

Government & Politics 90m ago

Senate boosts higher education spending

Senate boosts higher education spending

Rod Boshart

State Government 90m ago

Business

200,000-square-foot-facility to break ground near Cedar Rapids airport

200,000-square-foot-facility to break ground near Cedar Rapids airport

John Steppe

Business News Apr. 13, 2021 4:30 pm

COBRA free for six months

COBRA free for six months

Los Angeles Times

Business News Apr. 13, 2021 3:17 pm

Court replaces two judges on business court

Court replaces two judges on business court

Trish Mehaffey

Crime and Courts Apr. 12, 2021 3:18 pm

Business Notes: April 11, 2021

Business Notes: April 11, 2021

Business News Apr. 8, 2021 2:53 pm

Consumers & Personal Finance

Amazon.com to begin collecting Iowa sales tax Sunday

Amazon.com to begin collecting Iowa sales tax Sunday

George C. Ford

News Dec. 30, 2016 10:50 am

Many Eastern Iowa retailers opening doors on Thanksgiving

Many Eastern Iowa retailers opening doors on Thanksgiving

George C. Ford

News Nov. 22, 2016 1:46 pm

Should you pay airline for the bag it misplaced? U.S.…

Should you pay airline for the bag it misplaced? U.S.…

By Alan Levin and Michael Sasso, Bloomberg

News Oct. 19, 2016 12:04 pm

Alliant Energy apologizes for high energy bills, but says they’re…

Alliant Energy apologizes for high energy bills, but says they’re…

News Oct. 3, 2016 4:58 pm

Sports

Iowa football takeaways: Tory Taylor’s quest, Spencer Petras’ accuracy and…

Iowa football takeaways: Tory Taylor’s quest, Spencer Petras’ accuracy and…

Leah Vann

Hawkeye Football 3h ago

Kirkwood sweeps way into national volleyball quarterfinals

Kirkwood sweeps way into national volleyball quarterfinals

K.J. Pilcher

Sports 3h ago

At Lisbon, a track program, then a track ... and…

At Lisbon, a track program, then a track ... and…

Jeff Linder

High School Track and Field Apr. 13, 2021 4:42 pm

Bowling alleys, like universities, are melting pots

Bowling alleys, like universities, are melting pots

Mike Hlas

Iowa Hawkeyes Apr. 13, 2021 11:16 am

FOLLOW US

The Gazette is Iowa’s independent, employee-owned source for local, state, and national news coverage.

© 2021 The Gazette

All Rights Reserved.

  • Advertise with us
  • Privacy
  • Web Accessibility

Contact Us

  • 116 3rd St SE
    Cedar Rapids, Iowa 52401
  • customercare@thegazette.com
  • (319) 398-8333
  • Live Chat

Links

  • Puzzle Answers
  • CR Arrest Database
  • Article Removal Request
  • Archives
  • Green Gazette
  • Corridor Careers Jobs
  • Work at The Gazette
  • Customer Care

© 2021 The Gazette

All Rights Reserved.

  • Advertise with us
  • Privacy
  • Web Accessibility
Folience A Folience Company