The US Federal Reserve hiked rates for the seventh time since 2015 on Wednesday.
The Federal Reserve voted in favor of raising the target for its benchmark interest rate by 0.25% to a range of 1.75% to 2%, the highest level since 2008.
The Fed cited solid economic growth in raising its benchmark interest rate.
“Recent data suggest that growth of household spending has picked up, while business fixed investment has continued to grow strongly,” the Fed said.
Federal Reserve Chair Jerome “Jay” Powell said that “the main takeaway is that the economy is doing well”.
The decision to hike rates comes as the jobless rate in the US is at its lowest rate in nearly two decades of just 3.8%. Inflation is also showing signs of picking up after being below the Fed’s 2% for years.
A majority of the Fed also forecast two more increases this year.
“The Committee expects that further gradual increases in the target range for the federal funds rate will be consistent with sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee’s symmetric 2 percent objective over the medium term,” the Fed’s statement said.
In the updated quarterly economic forecast committee members said they expect core inflation to reach the Fed’s 2% target by the end of the year and forecast economic growth to reach 2.8% for the full year.