WatcherGuru
The Federal Reserve is projected to raise interest rates by 25 basis points at its next Federal Open Market Committee meeting. The increase remains a projection, not an announced policy decision.
Why it matters
A 25-basis-point increase equals a quarter of a percentage point. Higher interest rates raise borrowing costs and can weigh on assets whose valuations are sensitive to financing conditions.
Market impact
Investors will be watching the FOMC's decision and its guidance on monetary policy. The actual market response will depend on the decision and how it compares with expectations.
Frequently asked questions
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How large is a 25-basis-point rate increase?
It is equal to one-quarter of a percentage point.
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Has the Federal Reserve announced the rate increase?
No. The increase is projected for the next FOMC meeting and is not an announced policy decision.
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What would a rate increase mean for borrowing costs?
Higher interest rates raise borrowing costs and can tighten financial conditions.
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Why does the projected hike matter for asset valuations?
Higher borrowing costs can weigh on assets whose valuations are sensitive to financing conditions.
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What will investors watch at the next FOMC meeting?
Investors will watch the rate decision and the Fed's guidance on monetary policy. The market response will depend in part on how the decision compares with expectations.
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