“In view of realized and expected labor market conditions and inflation, the committee decided to raise the target range for the federal funds rate,” the Federal Open Market Committee said in its statement Wednesday. “Near-term risks to the economic outlook appear roughly balanced.”
Investors had almost fully expected the increase to a range of 0.75 percent to 1 percent following unusually clear signals from policy makers including Chair Janet Yellen, who is holding a press conference at 2:30 p.m. in Washington.
The U.S. economy has mostly met the central bank’s goals of full employment and stable prices, and may get further support if President Donald Trump delivers promised fiscal stimulus.
For now, officials stuck with their “gradual” approach to tightening monetary policy, while removing the word “only” when a previous statement called the approach “only gradual.” Central bankers left unchanged their median projections for three quarter percentage-point increases in 2018, while the median fed funds rate estimate for 2019 rose to 3 percent from 2.9 percent.
They made several changes to their language on inflation.