Fed announces rate hike

The Federal Reserve announced Wednesday it is raising the target range for its key interest rate from 2.25 percent to 2.5 percent, its highest level since 2008, to reflect the economy’s growing strength. Chairman Jerome Powell also said the Fed anticipates increasing rates only twice more in 2019 instead of the three times as it previously forecast. It’s good news for those with savings and money market accounts. But those with plans to borrow money or have variable rate debt, such as adjustable rate mortgages and home equity lines of credit, will probably have to pay more.

Tendayi Kapfidze, chief economist at LendingTree, expects there will be no further hike until June, after the Fed has a chance to assess the economy over the first half of the year. The Fed announcement prompted stock markets around the world to fall sharply. President Donald Trump had tweeted earlier this week that the prospect of a rate hike was “incredible” while “the outside world is blowing up around us.”