Fed Hikes Interest Rates, Signals Confidence in Economy
It likes what it sees. The Federal Reserve raised its benchmark interest rate by a quarter-point on Wednesday to 1.25 percent, reflecting the bank’s belief that the U.S. economy is sound. There’s hard evidence for that: after 80 straight months of job creation, unemployment fell to its lowest level since 2001. With that in mind, the Fed’s also unveiled its plan to begin paring down — possibly by September or October — its economy-stimulating $4.5 trillion in bonds and other investments, testing the economy’s ability to keep chugging along without its assistance.