In a highly anticipated move, the Federal Reserve finally raised the target range for the federal funds rate, hiking it by a quarter-percentage point. This was the first rate hike in nearly a decade and signals the central bank’s confidence in the U.S. economy. The course of interest rate normalization is expected to be gradual but will ultimately be determined by incoming economic data. Based on the Fed’s “dot plot,” which shows Federal Open Market Committee members’ expectations for interest rates in the future, officials are expecting the federal funds rate target to increase one percentage point by this time next year.
View the evolution of this decision in our interactive graphic below.