U.S. Fed raises interest rates

The US central bank, The Federal Reserve has raised the country’s interest rates to a range of 1.25 to 1.5 percent.

Said interest rate influences rates for mortgages, credit cards and other borrowings, and is therefore usually raised in times of steady economic growth and healthy consumer spending.

It’s the third time The Fed has raised rates this year, and the fifth since the 2008 financial crisis.

In a speech yesterday, outgoing Fed Chair, Janet Yellen said, the decision was taken based on lower unemployment, increased household spending, and bigger investments by businesses in recent quarters.

The Fed said, the US added around 228,000 new jobs in November.

A rate raise signals the Fed’s confidence on the strength of the US economy, which it said will further benefit from President Donald Trump’s proposed tax cut.

No significant impacts have been so far on the ringgit, which saw a yet higher opening of 4.0705/USD compared to 4.0785/USD yesterday.

The US central bank said it’s on track to increase rates three more times next year, and then twice in 2019.

It expects the unemployment rate to stand at 4.1 percent, and forecasts the US economy to grow at a faster rate of 2.5 percent, compared with a previous forecast of 2.1 percent.