Skip to main content
MENU
Subscribe
  • Sign Up Free
  • LOGIN
  • Subscribe
  • Topics
    • Alternatives
    • Consultants
    • Coronavirus
    • Courts
    • Defined Contribution
    • ESG
    • ETFs
    • Face to Face
    • Hedge Funds
    • Industry Voices
    • Investing
    • Money Management
    • Opinion
    • Partner Content
    • Pension Funds
    • Private Equity
    • Real Estate
    • Russia-Ukraine War
    • SECURE 2.0
    • Special Reports
    • White Papers
  • Rankings & Awards
    • 1,000 Largest Retirement Plans
    • Top-Performing Managers
    • Largest Money Managers
    • DC Money Managers
    • DC Record Keepers
    • Largest Hedge Fund Managers
    • World's Largest Retirement Funds
    • Best Places to Work in Money Management
    • Excellence & Innovation Awards
    • WPS Innovation Awards
    • Eddy Awards
  • ETFs
    • Latest ETF News
    • Fund Screener
    • Education Center
    • Equities
    • Fixed Income
    • Commodities
    • Actively Managed
    • Alternatives
    • ESG Rated
  • ESG
    • Latest ESG News
    • The Institutional Investor’s Guide to ESG Investing
    • ESG Sustainability - Gaining Momentum
    • Climate Change: The Inescapable Opportunity
    • Impact Investing
    • 2022 ESG Investing Conference
    • ESG Rated ETFs
  • Defined Contribution
    • Latest DC News
    • DC Money Manager Rankings
    • DC Record Keeper Rankings
    • Innovations in DC
    • Trends in DC: Focus on Retirement Income
    • 2022 Defined Contribution East Conference
    • 2022 DC Investment Lineup Conference
  • Searches & Hires
    • Latest Searches & Hires News
    • Searches & Hires Database
    • RFPs
  • Performance Data
    • P&I Research Center
    • Earnings Tracker
    • Endowment Returns Tracker
    • Corporate Pension Contribution Tracker
    • Pension Fund Returns Tracker
    • Pension Risk Transfer Database
    • Future of Investments Research Series
    • Charts & Infographics
    • Polls
  • Careers
  • Events
    • View All Conferences
    • View All Webinars
    • 2023 Defined Contribution East
    • 2023 ESG Investing
Breadcrumb
  1. Home
  2. ECONOMY
March 21, 2018 01:00 AM

Fed unanimously raises rates by 25 basis points, cites strengthening economy

Hazel Bradford
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print

    Members of the Federal Open Market Committee met market expectations Wednesday by raising the federal funds rate 25 basis points to a range of 1.5% to 1.75%.

    The vote was unanimous among the eight members attending the two-day meeting, who cited a strengthening labor market and moderately rising economic activity as the reason for the hike.

    FOMC members also voted unanimously to approve a 25-basis-point increase in the primary credit rate to 2.25%, which is the interest rate charged to commercial banks and other depository institutions on loans they receive from their regional Federal Reserve Bank.

    FOMC member projections for 2018 remain at three interest rate hikes in 2018, following the first meeting chaired by Jerome Powell. "We are trying to take the middle ground" between accommodative monetary policy and raising rates, he said at a post-meeting press conference. "I wouldn't expect the committee's projections … to move quickly."

    "It could change up, it could change down. The path could be a little less gradual or a little more gradual," Mr. Powell said.

    Janelle Woodward, global co-head of income strategies at BMO Global Asset Management, said in an interview: "The one thing that we will watch is that as we accelerate, does the target rate do anything on growth? There is enough underpinning and economic strength to support the path they've been on. It does say that the Fed thinks there's some legs to this."

    The FOMC statement noted that recent data show modest growth rates of household spending and business fixed investment, down from strong fourth-quarter readings that led the committee to cite solid gains.

    "That implies that they are looking at global growth and fiscal stimulus, (and they are) confident that the forward outlook is better," said Matt Toms, chief investment officer of fixed income at Voya Investment Management.

    Mr. Toms noted that the announcement "is a very patient statement" reflecting Mr. Powell's desire to show continuity. Going forward, "I think you will see a slightly more direct tone, which could create more uncertainty," Mr. Toms said.

    FOMC members increased their projections for when the federal rate would return to a normal, or neutral, level. "They do have it at 3.4% by 2020. The Fed is projecting getting into a less stimulative stance," said Mr. Toms.

    More interesting than this latest rate hike "is that the Fed is predicting a slightly more aggressive round of hikes from here and interest rates settling at a higher level than they had planned," said James Athey, senior investment manager with Aberdeen Standard Investments. "The drip, drip effect of the strong U.S. economy is starting to trickle down to a more bullish Fed stance. This is likely to drive the dollar higher and lead to weakness in Treasuries."

    Related Articles
    Wall Street warns of seismic pension fund shift into bonds this month
    Fed leaves rates unchanged; at least 3 hikes still expected this year
    Fed minutes show optimism increasing at January meeting
    Jerome Powell says strong outlook to prod Fed to review rate-hike path
    John C. Williams named president and CEO of New York Fed
    Fed members say path for future rate hikes will be 'slightly steeper,' minutes …
    Loomis Sayles' star bond manager talks about rising rates, trade wars
    Recommended for You
    jerome-powell-federal-reserve-chairman_i.jpg
    Inflation fight far from over, Powell says
    ONLINE_180709904_AR_0_ZDKAZHDZSXUT.jpg
    U.S. added 517,000 jobs in January; unemployment rate lowest since 1969
    Mohamed El-Erian
    Top economist Mohamed El-Erian says U.S. 'not in recession,' expects 2 more rate hikes
    The Institutional Investor's Guide to ESG Investing
    Sponsored Content: The Institutional Investor's Guide to ESG Investing

    Reader Poll

    January 25, 2023
    SEE MORE POLLS >
    Sponsored
    White Papers
    Show Me the Income: Discovering plan sponsor and participant preferences for cr…
    Morningstar Indexes' Annual ESG Risk/Return Analysis
    The Future of Infrastructure: Building a Better Tomorrow
    Outlook 2023: Opportunity in a volatile world
    Research for Institutional Money Management
    View More
    Sponsored Content
    Partner Content
    The Industrialization of ESG Investment
    For institutional investors, ETFs can make meeting liquidity needs easier
    Gold: the most effective commodity investment
    2021 Investment Outlook | Investing Beyond the Pandemic: A Reset for Portfolios
    Ten ways retirement plan professionals add value to plan sponsors
    Gold: an efficient hedge
    View More
    E-MAIL NEWSLETTERS

    Sign up and get the best of News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today
    December 12, 2022 page one

    Get access to the news, research and analysis of events affecting the retirement and institutional money management businesses from a worldwide network of reporters and editors.

    Subscribe
    Connect With Us
    • RSS
    • Twitter
    • Facebook
    • LinkedIn

    Our Mission

    To consistently deliver news, research and analysis to the executives who manage the flow of funds in the institutional investment market.

    About Us

    Main Office
    685 Third Avenue
    Tenth Floor
    New York, NY 10017-4036

    Chicago Office
    130 E. Randolph St.
    Suite 3200
    Chicago, IL 60601

    Contact Us

    Careers at Crain

    About Pensions & Investments

     

    Advertising
    • Media Kit
    • P&I Content Solutions
    • P&I Careers | Post a Job
    • Reprints & Permissions
    Resources
    • Subscribe
    • Newsletters
    • FAQ
    • P&I Research Center
    • Site map
    • Staff Directory
    Legal
    • Privacy Policy
    • Terms and Conditions
    • Privacy Request
    Pensions & Investments
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • Topics
      • Alternatives
      • Consultants
      • Coronavirus
      • Courts
      • Defined Contribution
      • ESG
      • ETFs
      • Face to Face
      • Hedge Funds
      • Industry Voices
      • Investing
      • Money Management
      • Opinion
      • Partner Content
      • Pension Funds
      • Private Equity
      • Real Estate
      • Russia-Ukraine War
      • SECURE 2.0
      • Special Reports
      • White Papers
    • Rankings & Awards
      • 1,000 Largest Retirement Plans
      • Top-Performing Managers
      • Largest Money Managers
      • DC Money Managers
      • DC Record Keepers
      • Largest Hedge Fund Managers
      • World's Largest Retirement Funds
      • Best Places to Work in Money Management
      • Excellence & Innovation Awards
      • WPS Innovation Awards
      • Eddy Awards
    • ETFs
      • Latest ETF News
      • Fund Screener
      • Education Center
      • Equities
      • Fixed Income
      • Commodities
      • Actively Managed
      • Alternatives
      • ESG Rated
    • ESG
      • Latest ESG News
      • The Institutional Investor’s Guide to ESG Investing
      • ESG Sustainability - Gaining Momentum
      • Climate Change: The Inescapable Opportunity
      • Impact Investing
      • 2022 ESG Investing Conference
      • ESG Rated ETFs
    • Defined Contribution
      • Latest DC News
      • DC Money Manager Rankings
      • DC Record Keeper Rankings
      • Innovations in DC
      • Trends in DC: Focus on Retirement Income
      • 2022 Defined Contribution East Conference
      • 2022 DC Investment Lineup Conference
    • Searches & Hires
      • Latest Searches & Hires News
      • Searches & Hires Database
      • RFPs
    • Performance Data
      • P&I Research Center
      • Earnings Tracker
      • Endowment Returns Tracker
      • Corporate Pension Contribution Tracker
      • Pension Fund Returns Tracker
      • Pension Risk Transfer Database
      • Future of Investments Research Series
      • Charts & Infographics
      • Polls
    • Careers
    • Events
      • View All Conferences
      • View All Webinars
      • 2023 Defined Contribution East
      • 2023 ESG Investing