As many expected, the U.S. Federal Reserve raised interest rates again on Wednesday, and predicted there would be around two more rate hikes in 2019 as well. The Federal Reserve has kept interest rates low over the past several years in order to stimulate the economy after the 2008 recession. Now that the economy has strengthened, it was decided to raise interest rates four times this year in order to combat inflation and keep the markets from overheating.
Wall Street saw decent gains yesterday morning before all three indexes showed a dip in points at the end of the day, with the Dow Jones down 87 points, and both NASDAQ and S&P 500 down 15 points each. After the Federal Open Market Committee made these decisions, Chairman of the Fed Jerome Powell made his announcements on national television and went into detail about why they were raising rates.
President Trump has been vocal in the past few days about the Central Bank, remarking that he believes increasing rates would be a bad move on their part. Undeterred, the Fed made their decision based on statistics on where the economy was headed. Most keeping an eye on the economy realized that these rate hikes were inevitable, but the news still sent the stock market down as investors became more cautious with their trading. Wednesday’s closing bell may indicate an overall slowing of a hot economy, which witnesses a lukewarm December with a few downturns amid a generally strong economy.
