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Fed chair says US economy in strong health as she announces third rate rise since 2008 and the first of several expected this year
Thursday 16 March 2017 05.10 AEDT Last modified on Thursday 16 March 2017 10.25 AEDT
The US Federal Reserve has sought to head off rising inflation with a third interest rate rise since the 2008 financial crash and the second in three months, taking the base rate from 0.75% to 1%.
The central bank set aside concerns about the impact of higher interest rates on consumer spending to confirm analyst projections that it is prepared to increase rates several times this year to keep a lid on inflation as it rises above its 2% target level.
The Fed’s chair, Janet Yellen,
said a wide range of indicators showed the US economy was in rude
health, allowing its interest rate setting committee to push rates back
towards historically normal levels. Policymakers voted nine to one to
Speaking after the decision, Yellen said she had met Donald Trump’s treasury secretary, Steven Mnuchin, “a couple of times” but had only been “introduced” to the president himself.
“I fully expect to have a strong relationship with secretary Mnuchin,” she said. “We had good discussions about the economy, about regulatory objectives, the work of the FSOC [Financial Stability Oversight Council] global economic developments, and I look forward to continuing to work with him.” She said she had had a very brief meeting with Trump “and appreciated that as well”.