Last week, the Federal Reserve raised its benchmark interest rate to a range between 0.75 percent and 1 percent. This marks the second rate hike in a three-month period.
Despite the increase, Federal Reserve chairwoman said that the Fed did not share the optimism of stock market investors and some business executives that economic growth is increasing at a quicker pace, stating that it still plans to move slowly to accommodate the country’s current economic pace.
“The data have not notably strengthened,” Yellen said. “We have not changed the outlook. We think we’re moving on the same course we’ve been on.”
According to the Fed, the United States economy is expanding at a “moderate pace,” with employers hiring, consumer spending and businesses investing more in their operations.
“The basis for today’s decision is simply our assessment of the progress of the economy,” Yellen said at a post-meeting conference. “And it’s been doing nicely.”
This is the third time the Federal Reserve has elected to raise mortgage interest rates since the financial crisis, the first time being at the end of 2015 and the second at the end of 2016.
According to a New York Times article, “People with credit card debt will likely see an immediate increase of about a quarter percentage point in their interest rates. The effect on longer-term loans is less direct, but the average rate on a 30-year mortgage rose by half a percentage point over the last year.”