For just the second time in a decade, the Federal Reserve raised interest rates by a quarter percent Wednesday. It signaled there could be additional increases next year as well.
The Fed’s key interest rate by a quarter point, from a range of 0.25 to 0.5 percent to a range of 0.5 to 0.75 percent and demonstrates officials’ confidence in the U.S. economy.
The Fed last raised interest rates in December 2015.
Markets were slightly up just after the announcement, but they started to drop about an hour later. By 3:30 p.m. EST, the Dow Jones industrial average had dropped more than 100 points.
The Fed released a new forecast Wednesday which projects U.S. economic growth this year to be 1.9 percent and 2.1 percent in 2017. Both would beat the Fed’s previous projection in September.