The Federal Open Market Committee raised its fed funds target rate by 25 basis points to between 0.50% and 0.75%, according to a statement released Wednesday afternoon.
The panel said it still expects gradual normalization of rates going forward and said near term risks to the outlook seem "roughly balanced."
The statement pointed to continued improvement in the labor market and moderate economic expansion. Inflation has risen, but remains short of the Fed's 2% target, although expectations have "moved up considerably."
Future hikes will be data dependent, according to the statement. "In light of the current shortfall of inflation from 2 percent, the Committee will carefully monitor actual and expected progress toward its inflation goal. The Committee expects that economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run. However, the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data."
The vote to raise rates was 10-0.
