The Federal Reserve raised interest rates on Wednesday, ending an extraordinary period of government intervention in the financial markets that started at the height of the recession.
After holding its benchmark federal-funds rate near zero for seven years, the Fed increased rates a quarter-percentage point. The move signals the end of a monetary policy that began amid the worst financial crisis since the Great Depression.
In a statement, the Fed said economic activity had been “expanding at a moderate pace. Household spending and business fixed investment have been increasing at solid rates in recent months, and the housing sector has improved further.”
Given the economic outlook, and “recognizing the time it takes for policy actions to affect future economic outcomes”, the Fed decided to raise the target range for the federal funds rate a quarter point, the first such rise in close to a decade.
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