The Federal Reserve raised the federal funds rate to a target range of 1% to 1.25%, marking the second increase in the rate in the last three months.
In a statement released Wednesday, the Fed said that the labor market strengthened in May, while the overall economy has been rising at a moderate pace this year. In addition, the Fed noted that household spending has been on the rise and business fixed investment is expanding. A decline in inflation below 2% also played into the decision to raise rates.
The Fed said that any future adjustments will be made based on realized and expected economic conditions as it aims to reach its objectives of maximum employment and 2% inflation.