Federal Reserve raises interest rates by a quarter percentage point

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.

The decision follows the Fed's first meeting since the election of Donald Trump, who has promised business-friendly policies and stimulus spending. "The central bank will seek to prevent too much inflation from breaking out in an economy it believes is getting close to operating at its full potential, which means Mr. Trump's stimulus might run up against the Fed chair Janet Yellen's (and perhaps her successor's) counter-stimulus," The New York Times writes.

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