Fed raises interest rates, keeps 2018 policy outlook unchanged

(Dec 14): The Federal Reserve raised interest rates on Wednesday but left its rate outlook for the coming years unchanged even as policymakers projected a short-term jump in US economic growth from the Trump administration’s proposed tax cuts.

In an early verdict on the tax overhaul, Fed policymakers judged it would boost the economy next year but leave no lasting impact, with the long-run potential growth rate stalled at 1.8%. The White House has frequently said its tax plan would produce annual GDP growth of 3% to 4%.

The expected fiscal stimulus, coming on the heels of a flurry of relatively bullish data, cleared the way for the US central bank to raise rates by a quarter of a percentage point to a range of 1.25% to 1.50%. It was the third rate hike this year.

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