- Central bank maintained outlook for one more increase in 2017
- Policy makers set out details for shrinking the balance sheet
(Jun 14 Bloomberg) Federal Reserve officials forged ahead with an interest rate increase and additional plans to tighten monetary policy despite growing concerns over weak inflation.
Policy makers agreed to raise their benchmark lending rate for the third time in six months, maintained their outlook for one more hike in 2017 and set out some details for how they intend to shrink their $4.5 trillion balance sheet this year. In a press conference after the decision was announced, Fed Chair Janet Yellen said the unwinding plan could be put into effect "relatively soon" if the economy evolves as the central bank expects.
"Near-term risks to the economic outlook appear roughly balance, but the committee is monitoring inflation developments closely,: the Federal Open Market Committee said in a statement Wednesday following a two-day meeting in Washington. "The committee currently expect to begin implementing a balance sheet normalization program this year, provided that the economy evolves broadly as anticipated."
Policy makers also issued a forecast showing another three quarter-point increases in 2018, similar to the previous projections in March.
Click on the link below to see the full story from Bloomberg: (by Christopher Condon and Craig Torres)