The U.S. Federal Reserve left interest rates unchanged for September and confirmed it will begin shrinking its massive $4.5 trillion bond portfolio, acquired during the financial crisis, in October.
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Fed governors signaled one more rate hike was coming this year, and that they will continue to strategically tighten monetary policy by gradually increasing short-term benchmark interest rates going into next year.
“We believe the recovery is on a strong track,” Fed Chair Janet Yellen said Wednesday after the central bankers’ two-day meeting concluded, the Wall Street Journal reports.
The next interest rate hike will mark the third move this year — once in March and a second time in June — that boosted benchmark rates to a range of 1% to 1.25%. Though these moves did shift long-term rates up a bit coming in to 2017, the 10-year Treasury is now hovering around 2.26%, down from 2.45% in Q4 2016 and up from last quarter’s 2.16% average.
To dive further into Fed policy and how it is impacting the commercial real estate industry, check out this story.
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