The US Federal Reserve hiked its benchmark short-term interest rate a quarter percentage point Wednesday and indicated that two more increases are likely this year, CNBC reported.
The move pushes the funds rate target to 1.75 percent to 2 percent. The rate is closely tied to consumer debt, particularly credit cards, home equity lines of credit and other adjustable-rate instruments.
In an unusually terse statement that ran just 320 words, the Federal Open Market Committee changed multiple phrases from its previous missives, pointing to a more optimistic view on economic growth and higher inflation expectations.
Though the statement contained less than half the words of some of the committee's typical communiques, there was a lot to unpack in the language.
With the 0.25 percentage point increase already priced in, financial markets were looking for how aggressive the FOMC would be in setting monetary policy for the rest of the year.
Markets had been waffling over expectations for a fourth rate hike this year — the FOMC also increased the funds rate target in March — and prior to the meeting were pricing in a 46.5 percent chance. The latest projections from committee members indicate the funds rate to rise to 2.4 percent by the end of the year, a 0.3 percentage point increase from the March forecast.