Federal Reserve Increases Interest Rates for First Time in 12 Months
The Federal Reserve raised its key short-term interest rate by one quarter point from 0.5% to 0.75% on December 14th. This was the first time rates have been increased since December 2015. This affected a prime rate increase from 3.5% to 3.75%. In addition, interest on variable-rate credit cards and home equity lines of credit will increase by 0.25%. This increase is considered to be subtle and a response to economic growth trends over the past year. It's important to note that the Federal Reserve also announced that two or possibly three rate hikes may occur in 2017. Analysts view this directive as an effort by the Feds to keep the economy humming while buffering the effects of the nation's potentially peaking business cycle. See a summary here.