[Washington, D.C.] In its last meeting for 2017 the Federal Reserve’s Federal Open Market Committee (FOMC`) agreed to raise the discount rate from 1.250% to 1.500%. The move was expected and based on the health of the economy and the unemployment rate falling, if not holding steady, the Fed’s felt the move will benefit the economy in the long run. It was also mentioned the move is designed to thwart inflation and keep it no higher than two percent.
“The stance of monetary policy remains accommodative, thereby supporting strong labor market conditions and a sustained return to 2 percent inflation.” FOMC
Two dissenting votes
On the nine FOMC voting members, surprisingly there were two who voted against the increase due to concerns of maintaining the existing target.
Voting for: Janet L. Yellen, Chair; William C. Dudley, Vice Chairman; Lael Brainard; Patrick Harker; Robert S. Kaplan; Jerome H. Powell; and Randal K. Quarles.
Voting against the action were Charles L. Evans and Neel Kashkari.