TRP - Economies and Markets: FOMC Raises Rates but Indicates Further Hikes Will be Gradual

EXECUTIVE SUMMARY
As widely expected, the Federal Reserve’s Federal Open Market Committee (FOMC) announced a quarter-point increase in the federal funds target rate on December 16, 2015—the first hike in nearly a decade and a break with a seven-year pattern of near- zero short-term interest rates. In its post-meeting statement, the FOMC noted that it saw economic risks as balanced and removed reference to global economic and financial developments. The FOMC also highlighted the importance that policymakers will place on achieving higher inflation, and noted that further increases are likely to be gradual.