Federal Reserve raises interest rates by a quarter percentage point

The thriving economy helped make this decision.
(Image credit: KAREN BLEIER/AFP/Getty Images)

Federal Reserve officials announced Wednesday that they will raise interest rates by a quarter of a percentage point, for a federal-funds rate between 0.5 percent and 0.75 percent. The move is only the second rate increase mandated by the bank since June 2006.

The Fed previously raised the interest rate 0.25 percent last December, and on Wednesday "indicated they see a brightening economic outlook and expect to raise short-term rates next year by another 0.75 percentage point — likely in three quarter-point moves," The Wall Street Journal writes. The Fed has a target of 2 percent, making a range of 0.5 to 0.75 still relatively low, although not as low as the near-zero rate in the years following the 2008 financial crisis.

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Jeva Lange

Jeva Lange was the executive editor at TheWeek.com. She formerly served as The Week's deputy editor and culture critic. She is also a contributor to Screen Slate, and her writing has appeared in The New York Daily News, The Awl, Vice, and Gothamist, among other publications. Jeva lives in New York City. Follow her on Twitter.