WASHINGTON — Citing signs of a strengthening economy, the Federal Open Market Committee (FOMC) of the Federal Reserve System raised a key interest rate.
The FOMC voted Dec. 13 to raise the federal funds rate — the rate at which banks lend to other banks — to 1.25 to 1.5 percent.
All indications since the FOMC met last November are that both the labor market and economic activity are growing solidly, the committee said in its statement.
"Household spending has been expanding at a moderate rate, and growth in business fixed investment has picked up in recent quarters," the FOMC said.
The committee said it expected economic conditions to evolve in a manner that would justify gradual increases in the federal funds rate.
"However, the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data," it said.