The Federal Reserve raised interest rates citing continued U.S. economic growth and job market strength. Roselle Chen reports.
The Federal Reserve raised interest rates on Wednesday. Fed chair Jane Yellen. (SOUNDBITE) JANET L. YELLEN, CHAIR OF THE BOARD OF GOVERNORS, FEDERAL RESERVE SYSTEM (ENGLISH) SAYING: "The Federal Open Market Committee decided to raise the target range for the federal funds rate by one quarter percentage point bringing it to one to one quarter percent." The Fed said it based its decision on continued U.S. economic growth and strength in the job market. It also said it saw recent softening in inflation as transitory. Ross Gerber of wealth management firm Gerber Kawasaki. (SOUNDBITE) ROSS GERBER, CO-FOUNDER, PRESIDENT AND CEO, GERBER KAWASAKI WEALTH AND INVESTMENT MANAGEMENT (ENGLISH) SAYING: "Well, I think, it's a good news in a lot of ways because the Fed, in their statement, said that they expect the GDP of the United States to increase and the unemployment to stay low, and inflation to stay low. So, the commentary was pretty positive, and the Fed is raising rates for the right reason. I think, the big risk down the line is what the economy is gonna look like in six or seven months, with tax reform and other of Trump's economic packages, part of its packages, isn't approved." The Fed pushed rates to near zero in response to the 2007-2009 financial crisis. It started bringing them back up in December 2015 as part of a normalization of monetary policy. Wednesday's hike is its fourth since then. The central bank also announced it would begin cutting its holdings of bonds and other securities this year.