"The central bank raised its benchmark short-term interest rate a quarter of a percentage point on Wednesday, and indicated two more hikes will likely come this year", writes CNBC. The latest increase puts the federal funds rate in a range between 1.75 and 2 percent.
A effect of the policies pursued by the Fed, the ECB and the Bank of Japan since 2008 has been a significant increase in global debt - at government, corporate and household levels - as ultra-low rates and torrents of liquidity ignited a global borrowing binge.
USA interest rates are set to rise further and faster than previously planned as surging economic growth forces officials to do more to try to see off the threat of inflation. Over the near term, however, inflation may exceed the Fed's target level thanks to rising oil prices.
Fed officials voted unanimously on Wednesday to increase this key rate, which influences the flow and supply of money in the US economy.
The Federal Reserve is getting tough.
However, higher rates would help savers earn more interest on their deposits.
Last year, the BIS estimated the proportion of zombies among listed companies in 14 OECD economies had doubled, to 10 per cent, since the crisis. Officials also said that "indicators of longer-term inflation expectations are little changed".
The dot plot showed that eight fed policy makers expected 4 or more 25-bps rate increases in 2018.
Higher rates in India can derail economic growth, which still is not on strong footing and can be negative for the equity market.
The Fed has long aimed for 2 percent inflation, a level policymakers think is key to a healthy economy. U.S. crude inventories came in way under expectations with a drawdown of 4.1 million barrels when a shortage of 1.4 million was forecasted.
The Fed anticipates that inflation will overshoot its 2% target this year; in March, officials saw that happening only in 2020.
The current economic expansion is the second-longest in USA history, and will set a record if it lasts a bit more than a year longer.
The unemployment rate has "declined", as opposed to "stayed low". "Household spending has picked up while business fixed investment has continued to grow strongly".
The Fed said its policy of further gradual rate increases will be "consistent with sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee's symmetric 2 percent objective". Risks to the economic outlook appear roughly balanced. The index rose 1.8 per cent in April from a year earlier. Wages have remained stagnant over that period of time, relieving inflationary pressure. The action means consumers and businesses will face higher loan rates over time.
"Voting for the FOMC monetary policy action were Jerome H. Powell, Chairman; William C. Dudley, Vice Chairman; Thomas I. Barkin; Raphael W. Bostic; Lael Brainard; Loretta J. Mester; Randal K. Quarles; and John C. Williams".