Fed Expects Economic Gains to Prompt Gradual Rate Hikes

More interest rate hikes are expected if the economy remains strong. More interest rate hikes are expected if the economy remains strong. |  Photo: WDIO-TV

Created: February 23, 2018 10:07 AM

WASHINGTON (AP) - The Federal Reserve says it expects that the ongoing strength of the U.S. economy will warrant further gradual increases in interest rates this year, delivering the same steady-as-it-goes message under new leader Jerome Powell as it had provided under Janet Yellen.

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The Fed's projection on rate hikes came with the release Friday of its semi-annual monetary report to Congress. Powell will testify on the report before the House Financial Services Committee next Tuesday, making his first public appearance since taking over as chairman earlier this month.

The report stated that the Fed expects steady economic gains will warrant "further gradual increases" in the Fed's benchmark rate. But it said the rate was likely to remain low enough to stimulate the economy over the next two years.

Copyright 2018 The Associated Press. All rights reserved.

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