What Does the Fed's Raising Interest Rates Mean?

From "The Federal Reserve will likely raise interest rates this week. This is what happens next.," The Washington Post, Dec. 14, 2015.
10 words 468 learners

Learn words with Flashcards and other activities

Definition First
Print Flashcards

Other learning activities

Answer a few questions about each word. Use this to prep for your next quiz! Compete with other teams in real time to see who answers the most questions correctly! Test your spelling acumen. Read the definition, listen to the word and try spelling it!

Teaching tools

Create and assign quizzes to your students to test their vocabulary. Assign learning activities including Practice, Vocabulary Jams and Spelling Bees to your students, and monitor their progress in real-time.

Full list of words from this list:

words only definitions & notes
  1. interest rate
    the percentage of a sum of money charged for its use
    The Federal Reserve is widely expected to raise its benchmark interest rate this week for the first time in nearly a decade, marking the end of the central bank’s emergency response to the financial crisis but raising new questions about its next steps.
  2. uncharted
    not yet surveyed or investigated
    The Fed dove into uncharted territory in 2008 when it took its target interest rate all the way to zero as the country slid into recession.
  3. recession
    a situation in which the state of the economy declines
    The Fed dove into uncharted territory in 2008 when it took its target interest rate all the way to zero as the country slid into recession.
  4. unconventional
    not conforming to accepted rules or standards
    It experimented with unconventional ways to stimulate the economy, pumping roughly $3.5 trillion into the recovery to boost the flagging economy.
  5. economy
    the system of production and distribution and consumption
    It experimented with unconventional ways to stimulate the economy, pumping roughly $3.5 trillion into the recovery to boost the flagging economy.
  6. hike
    increase
    Fed Chair Janet Yellen said earlier this month that she sees the risks to the Fed’s economic outlook as “very close to balanced” -- which many analysts see as code for a [interest rate] rate hike.
  7. monetary
    relating to or involving money
    Raising rates, however, is only the first step in getting the economy -- and Fed policy -- back to normal. The process will likely take several years, and there is heated debate over whether the pre-recession standards for a strong economy and appropriate monetary policy are even achievable.
  8. challenge
    a call to engage in a contest or fight
    After deciding to increase rates, the first challenge facing the Fed is exactly how to do it.
  9. gradual
    proceeding in small stages
    Officials have emphasized that [the FED] will move gradually to test the response of financial markets and the economy, both at home and around the world.
  10. inflation
    a general and progressive increase in prices
    Central bank officials have tried to convince the public that they do not plan on stair-step increases, emphasizing that they can move more quickly or more slowly, depending on the progress of the recovery.

    But the bar for changing course is unclear. Yellen has said she wants to see confirmation that inflation, which has been running below the central bank’s target of 2 percent for several years, is actually picking up.
Created on Mon Dec 14 12:09:17 EST 2015 (updated Mon Dec 14 12:28:08 EST 2015)

Sign up now (it’s free!)

Whether you’re a teacher or a learner, Vocabulary.com can put you or your class on the path to systematic vocabulary improvement.