Federal Reserve raises interest rates, eyes on future economic policy: CEI analysis

Today, the Federal Reserve has decided to raise interest rates by 25 basis points, the first increase in over three years. The decision shows the Fed’s commitment to fighting inflation and stabilizing the economy.

CEI senior economist Ryan Young:

“As expected, the Federal Reserve raised the federal funds rate in an effort to tame inflation. Speculation now turns to whether this was a one-time increase, or whether the Fed is entering a new cycle of continuing increases.

“The answer is not necessarily in the Fed’s hands. Upcoming policy choices on Iran, Canada, and tariffs will play a large role.

“Credibly ending the Iran war will help energy prices come down, though not for several months, since damaged infrastructure will take time to rebuild.

“Ending the pointless trade war with Canada will ease pressure on autos and construction that use Canadian steel and lumber.

“And tariffs will continue to raise prices not only by taxing products, but by their haphazard implementation. If Congress grants President Trump additional tariff authority in its Russia sanctions bill, this problem will grow even worse.”