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Fed meets amid rate hike expectations

Fed meets amid rate hike expectations

WASHINGTON: The Federal Reserve resumed meeting on Wednesday to discuss raising interest rates for the first time since 2006 to end its long crisis stance in monetary policy.

The Fed is expected to announce at 2:00 pm (1900 GMT) that it is hiking the benchmark federal funds rate by a quarter point to 0.25-0.50 per cent, after keeping it next to zero for seven years.

Take a look: US Fed meets on historic rate rise

The move, which the Fed has signalled for months, would represent the central bank’s confidence in the US economic outlook and also kick off a likely slow series of rate hikes to “normalise” central bank policy over the next two years. That ultimately will mean raising the cost of borrowing for everyone from foreign governments and companies to home and car buyers, while also better rewarding savers on their bank accounts.

A Fed rate increase “is a positive sign for the US economy — to be welcomed, not feared,” said Stuart Hoffman, chief economist at PNC Financial Services Group.

Published in Dawn, December 17th, 2015

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