The Federal Open Market Committee raised the federal funds target rate 25 basis points to a range of 1.25% to 1.50%, the Fed announced Wednesday.

The move, which was widely expected, passed by a 7-2 vote, with Federal Reserve Bank of Minneapolis President Neel Kashkari and Federal Reserve Bank of Chicago President Charles Evans dissenting, preferring to leave the rate at 1% to 1.25%.

The Summary of Economic Projections was little changed, with three rate hikes still seen as likely for next year, with the fed funds rate at 2% to 2.25% at yearend, as the prior SEP suggested.

Bloomberg News

While six of the 16 FOMC members see three hikes next year, unchanged for the September SEP, four or more hikes were expected by four members in the latest SEP, down from 5 in the earlier one. The market is expecting two hikes in 2018.

Further ahead, the panel sees two hikes each in 2019 and 2020, with the median projection for 2020 rising to 3.1% from 2.9% in September’s SEP.

There was no mention of the expected tax reform and whether FOMC members took that into account for their projections.

The statement said monetary policy would help the labor market "remain strong" and inflation would remain below target in the near term, but rise near the 2% target in the medium term.

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