As expected, the Federal Open Market Committee Wednesday announced it raised the fed funds target by 25 basis points to between 0.75% and 1.00%.
The market priced in the hike after Fed officials called the March meeting "live" or said a rate hike could be appropriate "soon."
"Indeed, at our meeting later this month, the Committee will evaluate whether employment and inflation are continuing to evolve in line with our expectations, in which case a further adjustment of the federal funds rate would likely be appropriate," Federal Reserve Board Chair Janet Yellen said in a March 3 speech, sealing the market's expectations.
The Fed also released its Summary of Economic Projections, or dot plot, which still calls for three rate hikes this year.
Federal Reserve Bank of Minneapolis President Neel Kashkari dissented, preferring no rate hike.
The Fed's statement said labor market strengthening continued, with solid job gains and steady unemployment. Moderate gains were made in household spending and business fixed investment firmed.
"Inflation has increased in recent quarters, moving close to the Committees 2 percent longer-run objective; excluding energy and food prices, inflation was little changed and continued to run somewhat below 2 percent. Market-based measures of inflation compensation remain low; survey-based measures of longer term inflation expectations are little changed, on balance," according to the statement.
The FOMC said near-term economic risks appear "roughly balanced."
Despite the 25 basis point increase, "monetary policy remains accommodative," according to the statement.
