U.S. Federal Reserve Board Meeting (12-13 December 2017)

The Committee on Open Market Operations of the US Federal Reserve decided to raise the rate to 1.25-1.50 percent following the results of the meeting held within two days. It coincided with the forecast of the vast majority of analysts and economists. However, the decision was not unanimous. Charles Evans and Neil Kashkari voted against the raise.

Investors’ attention was focused on changes in the U.S. Federal Reserve forecasts. The Fed expects the United States economy to grow by 2.5 percent this year. Previously, an increase of 2.4 percent was assumed. The forecast for the growth of the country’s gross domestic product for the next year was raised from 2.1 to 2.5 percent, and for inflation from 1.6 to 1.7 percent. The unemployment forecast was revised downward from 4.3 to 4.1 percent.

The U.S. FRS statement notes that the growth rate of consumer prices in the near term will remain below the target of 2 percent. Inflation will rise to this level in the medium term.

Members of the Committee on Open Market Operations expect that the activity in the country’s economy will continue to grow, but the growth rate will be moderate. They also praised the situation in the U.S. labor market and expressed the hope that it would remain strong.

Members of the meeting expect the rate to be raised three times next year.