NEW YORK (AP) – U.S. stocks slipped Wednesday after the Federal Reserve raised interest rates and said it expects to increase rates two more times by the end of the year. Investors bet that several huge deals are more likely to happen after a federal court cleared AT&T’s $85 billion purchase of Time Warner.
Wall Street was already certain the Fed would raise interest rates Wednesday. The central bank’s decision makers also said they plan to raise rates two more times later this year for a total of four increases. Investors had debated all year if rates would rise three or four times, and some are concerned that if rates rise that quickly, it could stifle economic growth because consumers and businesses will have to pay more to borrow money.
The Fed’s projections might have been unwelcome, but they weren’t a shock: for months there have been signs the economy is getting stronger. Another came on Wednesday, when the Labor Department said wholesale prices climbed at a faster pace in May. The Fed says inflation is likely to increase and projects unemployment will hit a 50-year low in a few months, and it wants to keep inflation under control.
FILE- In this April 24, 2018, file photo, replicas of Arturo Di Modica’s “Charging Bull” are for sale on a street vendor’s table outside the New York Stock Exchange. The U.S. stock market opens at 9:30 a.m. EDT on Wednesday, June 13. (AP Photo/Mary Altaffer, File)
“There was nothing terribly surprising in the announcement,” said Jeremy Zirin, head of investment strategy for UBS’ global wealth management business. He said the Fed’s