- The Federal Reserve announced Wednesday that it was raising the discount rate by a quarter of a percentage point, to 0.50%. This is the fifth time the Fed has raised the discount rate since December.
- In a statement, the Fed said that the move was intended to keep the economy on a path of “moderate growth.” The discount rate is the interest rate that the Fed charges banks for short-term loans. By raising the discount rate, the Fed is making it more expensive for banks to borrow money.
- This is meant to discourage banks from taking out loans and then lending that money out at a higher interest rate. This can help to keep inflation in check. The Fed also said that it was continuing to plan on raising.
How will this increase impact the economy?
- The Federal Reserve’s decision to raise the discount rate by 0.25 percentage points to 0.50 percent is likely to have a modest impact on the economy.
- The Fed said the increase was needed to offset the effects of recent hurricanes, which have disrupted economic activity.
- The move will make it more expensive for banks to borrow from the Fed, which could lead to higher interest rates for consumers and businesses.
The potential implications for consumers and businesses
The higher discount rate could mean that consumers and businesses will have to pay more to borrow money. This could lead to less spending and borrowing, which could slow down the economy.
Summary
- The Federal Reserve announced on Wednesday that it was raising its discount rate by 0.25 percentage points, to 0.50 percent. The move is intended to help keep inflation in check and suggests that the Fed is confident in the economy’s prospects.
- This is the rate at which the Fed lends to banks. The vote was unanimous. The Fed said that the economy continues to improve and that it expects to raise the federal funds rate later this year.
CTA
- The Federal Reserve announced on Wednesday that it was raising its discount rate by 0.25 percentage points, to 0.50 percent. The move is intended to help keep inflation in check and suggests that the Fed is confident in the economy’s prospects.
- This is the rate at which the Fed lends to banks. The vote was unanimous. The Fed said that the economy continues to improve and that it expects to raise the federal funds rate later this year.
