The U.S. Federal Reserve is raising the benchmark borrowing rate to a range of 2.25 percent to 2.50 percent, a move that would put it at the highest level in a decade.
The bond market is worried the trade war, slowing global growth and a drop in oil prices are signs the economy is slowing and may be heading for a recession. Nervousness spilled over into stocks too.
Federal Reserve Chairman Jerome Powell said that the outlook for the U.S. economy remains solid and that interest rates are nearly within a "neutral" range, touching off a surge in stock prices.
Bullish stocks, low unemployment, high confidence — from most angles, the economy is strong. But questions linger as the Federal Reserve raises interest rates for the third time in 2018.
It was the second time in a month that President Trump had taken aim at the Fed. In a Reuters interview, he also accused China and Europe of manipulating their currencies to gain leverage in trade.
The Federal Reserve held steady with no rate increase, but it is expected to raise rates twice more by the end of the year. The Fed said "economic activity has been rising at a strong rate."
Presidents usually don't comment directly on Fed policy. But President Trump broke with that tradition Thursday, saying, "I'm not thrilled" about the Fed's interest rate increases.
The Fed boosted a key interest rate again — its seventh hike since 2015. The move, which was expected, will trigger higher rates on credit cards, home equity lines and other kinds of borrowing.
For the first time in four years, the rate on the 10-year U.S. Treasury note crossed 3 percent. While it signals a stronger economy, it makes bonds more attractive investments, undermining stocks.
The central bank raised its key interest rate for the first time under Jerome Powell, announcing a quarter-percentage-point hike. Economists wonder if faster growth will mean more aggressive hikes.