Sept. 27, 2018 — The Federal Open Market Committee raised target interest rates by 25 basis points to a range of 2 percent to 2.25 percent, the highest since April 2008. The widely expected move was the third interest rate increase of 2018 and the eighth since it began normalizing post-crisis rates in December 2015, with Fed projections anticipating one more hike this year.
In its policy statement, the FOMC said labor market conditions and economic activity continue improving. Meanwhile, the Fed released more optimistic economic forecasts. It increased projected 2018 growth in the gross domestic product from 2.8 percent to 3.1 percent, slowing to 2.5 percent next year.
While Fed watchers made much of the sudden absence of any reference to “accommodative” monetary policy in the panel’s statement, Fed Chairman Jerome Powell said the change “does not signal any change in the likely path of policy.”
The FOMC has two meetings left this year, on Nov. 7-8 and Dec. 18-19.