For months there has been speculation that the Federal Reserve would raise interest rates, and on December 16th, with an unanimous vote, they did just that. For the first time since the financial crisis, the Federal Reserve announced they are raising short term interest rates. The rate was raised from a range of 0% to 0.25% to a range of 0.25% to 0.5%.
The Fed also stated that they predict to “raise interest rates by about one percent point a year over the next three years, reaching 3.3 percent by 2019.” Beginning on December 17, the Fed will “seek to keep short-term interest rates in its new range." To set the new baseline, the Fed said it would “pay banks an interest rate of 0.5 percent on unused money, and it would borrow up to $2 trillion from other financial firms at a rate of 0.25 percent.” (The New York Times).
This decisions is a sign “of how much the economy has healed since the Great Recessions.” This small change in the interest rate “will affect millions of Americans, including investors, home buyers and savers.” (CNN Money).
Gillespie, Patrick. “Finally! Fed raises interest rates” CNN Money. 16 December 2015. Web. 16 December 2015.
Appelbaum, Binyamin “Fed Raises Key Interest Rate for First Time in Almost a Decade” The New York Times. 16 December 2015. Web. 16 December 2015.