US Economy: Federal Reserve raises benchmark interest rates

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The US Federal Reserve has raised interest rates a quarter-point, making it the sixth adjustment in three years. It's also the first interest rate move under new Chairman Jerome Powell. CGTN's Daniel Ryntjes report.

Not a bad moment to be walking into your first press conference as chairman of the US Federal Reserve. Jerome Powell is tasked with managing the supply of dollars to meet the twin goals of maintaining strong employment and keeping inflation in check. It's going pretty well.

JEROME POWELL CHAIR, US FEDERAL RESERVE "Indeed the economic outlook has strengthened in recent months. Several factors are supporting the outlook: Fiscal policy has become more stimulative, ongoing jobs gains are boosting incomes and confidence, foreign growth is on a firm trajectory, and overall financial conditions remain accommodative."

So following its two-day meeting, the rate-setting committee decided to raise the Federal Funds Rate by a quarter point to a range of between 1.5 and 1.75 percent. But despite strong jobs growth, wages so far have not risen much, while consumer and business spending has moderated a bit since the end of last year.

JEROME POWELL CHAIR, US FEDERAL RESERVE "There's no sense in the data that we're on the cusp of an acceleration of inflation. We have seen moderate increases in wages and price inflation and we seem to be seeing more of that. We will be alert to that."

So members of the Fed are predicting two more quarter-point rate hikes this year, and up to four hikes next year.

DANIEL RYNTJES WASHINGTON "So for now, it seems there is not too much worry about an overheating effect following the passage of a massive overhaul of business and personal taxes in Congress which would otherwise force them to raise rates at a quicker pace than otherwise expected. Daniel Ryntjes, CGTN, Washington."