WASHINGTON — Citing a strengthening economy, the Federal Open Market Committee (FOMC) of the Federal Reserve System has raised a key interest rate.
The FOMC has raised the federal funds rate — the rate at which banks lend money to other banks — to a range between 0.75 percent and 1 percent, the committee announced March 15.
This marks the third time the Federal Reserve has raised the federal funds rate since December 2015, after nearly a decade of keeping the rate at near zero.
At a press conference, Federal Reserve Chair Janet Yellen said she expected the FOMC would raise the key rate at least twice more during 2017.
"The simple message is the economy is doing well," Ms. Yellen said.
In the FOMC press release, the committee cited evidence of a stronger economy. These included solid job gains, increasing household spending and firmer business investment.
Inflation has not changed much, excluding energy and food prices, and continues to run somewhat below the Fed's goal of 2 percent, the committee said.
"The committee expects that economic conditions will evolve in a manner that will warrant gradual increases in the federal funds rate," the FOMC said.
"The federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the long run," the committee said. "However, the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data."