The U.S. Federal Reserve voted to raise interest rates for the first time in 2017 at its two-day Federal Open Market Committee (FOMC) March meeting, which concluded on Wednesday. The move was widely expected by analysts and Fed watchers: Economic indicators have been pointing an economy that’s near full employment, and inflation seems to be firming up despite being weak in 2016.
The U.S. central bank will raise the target range for the federal funds rate to 0.75 to 1 percent. This is the third time the Fed has raised interest rates in the last decade; the last time the U.S. central bank voted to raise interest rates was in December of last year. At a press conference following the decision, Federal Reserve Chairwoman Janet Yellen said, “Our decision to make another gradual reduction in the amount of policy accommodation reflects the economy’s continued progress toward the employment and price-stability objectives assigned to us by law.”
The March rate hike has brought up the perennial question of whether the Fed is raising rates too soon (or too late). On Wednesday, economists and market participants were looking for signs pointing to whether Fed policy makers are ready to move away from historically low interest rates, which have been in place since 2007 as part of the post-recession recovery effort.