The Federal Reserve hiked interest rates on Wednesday, the third time in six months, as unemployment in the US has continued to fall and consumer confidence has risen.
The Fed raised its benchmark borrowing rate range by a quarter-point, to between 1 and 1.25 percent, the highest since September 2008.
The Fed expects the economy to “expand at a moderate pace,” or for inflation to pick up to about 2 percent by next year after a slew of disappointing readings, the Federal Open Market Committee said in a statement.
The widely expected hike is intended to cool the economy by making it more expensive to borrow money.
The central bank also announced it plans to start selling its holdings of Treasury and agency bonds this year, the first time since it started buying up debt to stabilize the economy following the financial crisis in 2008.