Federal Reserve Increases Interest Rates

Jun 15, 2017

The Federal Reserve’s overnight borrowing rate was raised on Wednesday. The central bank is targeting a rate between 1 percent and 1.25 percent. One more interest rate increase is expected in 2017. The Federal Reserve also announced plans for how it will begin to liquidate the securities that it bought during the financial crisis. To begin unwinding its $4.5 trillion balance sheet, the Fed will not reinvest some of the funds it receives from the proceeds of maturing bonds. It will only invest money back into the market if it receives more than $6 billion in principal a month. This $6 billion cap will increase every three months until it hits $30 billion a month.