By Heather Long December 13 at 2:08 PM
The Federal Reserve lifted its benchmark interest rate on Wednesday by a quarter point to a range of 1.25 to 1.5 percent, a widely expected move that the central bank said is happening because America’s economy continues to improve. This is the fifth rate increase since the bank cut the rate to nearly zero during the financial crisis of 2008.
The Fed cast the decision as a positive signal that the U.S. economy is healthy. Unemployment is now at the lowest level since 2000, growth is picking up and inflation remains tame. The Fed bumped up its expectations for growth this year and next. The economy is on track to expand 2.5 percent this year and next year, the Fed now says. It’s previous estimate was 2.1 percent expansion in 2018. Unemployment is expected to fall even further to below 4 percent in 2018.
“The labor market has continued to strengthen” and “economic activity has been rising at a solid rate,” the Fed said in a statement. “Hurricane-related disruptions and rebuilding have affected economic activity, employment, and inflation in recent months but have not materially altered the outlook for the national economy.”
