The policy-making arm of the Federal Reserve is raising interest rates a quarter of a percentage point for the third time in six months.
The Federal Open Market Committee decided to raise the target range for the federal funds rate to 1 to 1.25 percent.
The central bank kept the federal funds rate at zero from December 2008 through December 2015. At the December 2015 meeting it raised the rate to a quarter of a percentage point and then a year later in December 2016 raised it again to a range of 0.5 to 0.75 percent. In March of 2017, the committee raised the rate to 0.75 to 1 percent. This is the third time that the committee has raised rates in a span of six months.
The decision to hike rates was contingent on whether improvement had been made toward the central bank’s two objectives, maximum employment and price stability, or inflation approaching its 2 percent objective.
The committee said that labor-market data had improved and the unemployment rate has declined since the group met in May. The Fed also noted improvements in job gains, an uptick in household spending, and improvement in business fixed investment.
"The Committee continues to expect that, with gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace, and labor market conditions will strengthen somewhat further," the statement read. "Inflation on a 12-month basis is expected to remain somewhat below 2 percent in the near term but to stabilize around the Committee's 2 percent objective over the medium term. Near term risks to the economic outlook appear roughly balanced, but the Committee is monitoring inflation developments closely."