The Fed just ended Washington’s cheap-money era
The Federal Reserve’s decision Wednesday to raise its benchmark interest rate by a quarter percentage point to 4% surprised almost no one. Inflation is considerably above the Fed’s 2% target. Economic activity is expanding at a solid pace. Capital investment is robust, job gains have kept pace with the workforce, and unemployment has changed little. The vote was unanimous.
TL;DR
- The Federal Reserve raised its benchmark interest rate by 0.25% to 4%.
- Inflation is significantly above the Fed's 2% target.
- Economic activity is strong, with robust capital investment and steady job gains.
- The Fed's rate hike signals the end of an era of cheap borrowing for the government.