The Federal Reserve is raising its key interest rate for the third time this year and foresees three additional hikes in 2018, a vote of confidence directed squarely at President Trump.
The Fed said Wednesday that it’s lifting its short-term rate by a modest quarter-point to a still-low range of 1.25 percent to 1.5 percent. It is also continuing to slowly shrink its bond portfolio. Together, the two steps could lead over time to higher loan rates for consumers and businesses and slightly better returns for savers.
The central bank said in a statement after its latest policy meeting that it expects the job market and the economy to strengthen further. Partly as a result, it expects to keep raising rates at the same incremental pace next year under the leadership of Jerome Powell, who will succeed Janet Yellen as Fed chair in February.