Federal Reserve raises interest rates for third time in 2017

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Fed officials acknowledged in their latest forecasts that the economy had gained steam in 2017 by raising their economic growth forecasts and lowering the expected unemployment rate for the coming years.

"At the moment, the USA economy is performing well", Yellen told reporters.

"I think all of us agree that it is appropriate to tailor regulatory requirements ... to the systemic footprint of firms", Yellen said. We're in a synchronized expansion.

Bitcoin has had a monumental year - the cryptocurrency has increased more than 17 times in value since the start of 2017, and has grown massively in popularity, gradually finding its way into the mainstream. Those rates are far below the 3 per cent to 4 per cent growth that the Trump administration insists would result from its economic policies of tax cuts, deregulation and stricter enforcement of trade laws against unfair foreign imports. In its Wednesday statement, the Fed's so-called "dot plot" of interest rate projections showed that the median forecast was for three rate rises next year.

Markets have priced Wednesday's likely interest rate rise to perfection and so the greenback's response to this in itself is unlikely to be noteworthy. "The committee continues to expect that, with gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace and labor market conditions will remain strong", the statement said. Voting against the action were Charles L. Evans and Neel Kashkari, who preferred at this meeting to maintain the existing target range for the federal funds rate. "Chair Powell will inherit an economy with solid growth".

But he has also expressed a desire to pull back on numerous regulations that were imposed on banks after the 2008 financial crisis. It is also continuing to slowly shrink its bond portfolio. It also allowed Fed Chair Janet Yellen, at her final press conference before her term ends in February, to signal an all-clear for the U.S. economy a decade after the onset of the 2007-2009 recession.

Even so, she said, officials concluded that monetary policy doesn't need to change significantly.

The indications came in the form of the Federal Reserve's "dot plot" of interest rate projections it released after announcing a rate hike yesterday morning (Singapore time).

The minimal increase in interest rates "indicates the central bank is trying to soothe the market and prevent it from overreacting at a time when liquidity is becoming tighter towards the end of the year", Liu Dongliang, a Shenzhen-based analyst with China Merchants Bank, said in a report on Thursday. "I found her to be extraordinarily intelligent, easy to work with and easy going".

IG market strategist Pan Jingyi said the weak inflation is fuelling market doubt over the Fed's ability to hike rates that much in 2018.

It hasn't so far, presenting a challenge for the Fed.

Still, solid hiring and a low unemployment rate have yet to accelerate wages, a key reason why inflation remains below the Fed's 2 percent target rate.

The low rate policy was introduced in order to encourage investment after the financial crisis plunged the world into recession.

Most analysts do not expect benchmark interest rates to be increased given the high corporate debt levels in the country and the outlook for slowing economic growth in 2018.

In response to a question about the possibility of the Fed's own digital currency, Yellen acknowledged that there had been discussions on the topic, but confirmed that it was not under serious consideration at present. That means not too high, and not too low. Fed Chair Janet Yellen is scheduled to hold a press conference half an hour later. Mr. Powell was nominated last month to take the helm and is awaiting Senate confirmation, but should face no difficulty after a panel voted 22-1 last week to advance his nomination.

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