Federal Reserve could raise short-term rates

WASHINGTON – The Federal Reserve last week signaled it could raise short-term interest rates by mid-June.
The Fed, after its two-day meeting, issued a statement saying it wouldn’t rush into raising the rates, but believes the economy is in a better place to lift some of the easy-money policies implemented following the 2008 economic crises.
U.S. unemployment rates have decreased to 5.5 percent, showing a return of economic strength, but inflation is still below the targeted rate of 2.2 percent.
The interest rate hike would effectively increase the cost of borrowing, which would have a resonating effect on the economy. Those who rely on interest on savings or revenue from lending would do better, as increased rates help savers and lenders.
The increase in rates would come at a time when other central banks around the world are doing just the opposite and are implementing easy-money policies to help spur economic growth.

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