Despite enormous pressure from President Trump, the U.S. Federal Reserve announced Wednesday it is increasing interest rates by a quarter point.
The Fed said in a statement it is raising the key borrowing rate to a range of 2.25 percent and 2.50 percent — the highest level in a decade. The economy was in the early stages of the financial crisis and the beginning of the Great Recession.
The decision stands to affect rates on all kinds of borrowing, from home mortgages to credit cards. Over the past year, the 30-year mortgage rate has climbed from 3.95 percent to a peak of nearly 5 percent in November — a seven-year high. It has since dropped to 4.63 percent.
The Fed also said it will slow down the pace of interest rate increases in 2019. It gave a nod to concerns about global economic growth by saying it will monitor global and financial developments.
New signs of the economy softening combined with market volatility lately has had many economists worried that continued rate hikes will dampen growth. The president has ramped up pressure on the Fed, calling on the central bank to stop increasing interest rates. He called the Fed his “greatest threat” in an October interview with Fox Business, and has singled out Fed chairman Jerome Powell for pointed attacks.