The U.S. Federal Reserve on Wednesday raised its benchmark interest rate for the third time in a year, pushing the upper bound of the widely monitored rate range to 2.25 per cent.
The move was widely expected, as investors who bet on foreign exchange rates were forecasting a 100 per cent chance of a hike in recent days and weeks. But investors will nonetheless eagerly parse the central bank’s announcement of the decision to get a glimpse of its line of thinking — and try to deduce how many more hikes are coming and when.
For comparison purposes, the Bank of Canada’s benchmark interest rate currently sits at 1.5 per cent, but that is also widely expected to rise next month to 1.75 per cent.
The U.S. central bank is expected to raise its rate again in December, and at least one more time next year.
Federal Reserve chair Jerome Powell will speak at a news conference at 2:30 p.m. ET to lay out the bank’s line of thinking.