Posted December 16, 2015

Fed Raises Key Interest Rate for First Time in Almost a Decade

Hike of 0.25 percent is seen as a vote of confidence in the economy.

The Federal Reserve said today that it would raise short-term interest rates for the first time since the financial crisis struck, a vote of confidence in the strength of the American economy at a time when much of the rest of the global economy is struggling.

The widely anticipated decision, a milestone in the Fed’s postcrisis stimulus campaign, ends a seven-year period in which the Fed held short-term rates near zero. Even as it raises its benchmark interest rate by 0.25 percentage points, however, the Fed emphasized subsequent increases would come slowly.

Interest rates on mortgages and other kinds of loans, and on savings accounts and other kinds of investments, are likely to remain low by historical standards for years to come.

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