Abroad

3/17/2017

FED Decided Interest Increase in March Meeting

US Central Bank (FED) has increased policy interest to 0.75-1.00% with 25 base point increase in March meeting

US Central Bank (FED) has increased policy interest to 0.75-1.00% with 25 base point increase in March meeting. Decision has been taken by votes of 9 FOMC members out of 10 under the leadership of Fed President Janet Yellen.

In the announcement, it is said, "Under the light of realized and expected labor force conditions and inflation, Committee has decided the federal funding rate to 0.75-1.00 margin".

Thus, FED has made the third interest rate increase since June 2006. First interest rate increase of FED, after June 2006, has been made in FOMC meetings in December 2015 and second in December 2016. 

FED has also updated the expectations on US economy in March meeting. Average growth rate estimation of this year has been 2%, 1.9%. In previous projections released in December, subject rates were 2% and 1.9%.

FED has maintained average fix inflation expectation ratio for 2017 as 1.9%, for next two years as 2% fixed 1, in 2018 and 2019 growth projections as 2.1% and .....respectively.

FED President Yellen, "FOMC considered gradual interest rate increase appropriate for some time for reaching and protecting our targets, if economic conditions develope as we expected. Our decision today has been taken on this basis, it does not represent a new evaluation on future economic outlook or monetary policy". Yellen has also noted that economy expected to get stronger as to allow gradual increase of the economy, they foreseen to make interest increase three times each this year and next year (within two years).

T.C Central Bank has kept policy interest rate fixed on 8.00%, has increased late liquidity borrowing interest rate to 11.75% from 11.00%.