Fed Still On Track For Two Interest-rate Increases In 2016

The Federal Reserve on Wednesday signaled it still plans to raise interest rates twice in 2016, but the odds of just one move are much higher now compared to a few months ago. Six of the central bank's top 17 officials predict one rate hike this year, up from only one voter in March. The Fed also indicated it will raise rates three times apiece in 2017 and 2018 instead of four. In the long run, the FOMC predicts the fed funds rate would end up at 3% vs. a prior 3.3% target. The FOMC trimmed its 2016 GDP estimate to 2% from 2.2%. It also suggested inflation would rise a bit faster this year, to a 1.4% pace vs. 1.2%. The rest of the Fed's forecast for the next three years was little changed. The bank updated its forecast after its June meeting at which policymakers voted 10-0 to leave its benchmark short-term interest rate alone.