WASHINGTON, D.C. (RFD NEWS) — The Federal Reserve raised its benchmark interest rate by a quarter percentage point Wednesday, bringing the federal funds target range to 3.75 percent to 4 percent.
The Federal Open Market Committee approved the increase in a unanimous 12-0 vote, citing elevated inflation and continued economic growth.
The Fed said economic activity is expanding at a solid pace, with resilient domestic spending, strong productivity growth, and robust capital investment. It also said job gains have kept pace with the workforce and the unemployment rate has changed little.
For farmers and other rural borrowers, the rate increase could mean higher borrowing costs, particularly for variable-rate operating loans and other credit that adjusts with market rates. Producers financing equipment, land or other major purchases could also face higher costs when taking out or refinancing loans.
However, existing fixed-rate loans generally will not see their rates change as a direct result of Wednesday’s decision.
The Fed said the rate increase is intended to bring inflation back to its 2 percent goal more quickly.
