Borrowing Costs: Rate Hike and Consumers Businesses

borrowing costs: The increase in the short-term rate by a quarter-point to a still-low range of 1 percent to 1.25 percent could lead to higher borrowing costs for consumers and businesses and slightly better returns for savers, according to The Japan Times. The Fed foresees one additional rate hike this year, unchanged from its previous forecast. The Fed also announced plans to start gradually paring its bond holdings later this year, which could cause long-term rates to rise. It gave no hint of when that might occur. Fed officials reiterated their belief that that both inflation and economic growth will pick up. The Fed chose to raise rates again despite economic weakness at the start of 2017 and a further slowdown recently in inflation, which remains persistently below the Fed's 2 percent target rate. (news.financializer.com). As reported in the news.