The Federal Reserve on Wednesday raised interest rates for the first time since 2006, a widely expected move that demonstrates its confidence in the U.S. economic recovery.
The Federal Open Market Committee, the central bank’s policy-making body, voted unanimously to raise the federal funds rate by 25 basis points to a new target range of between 0.25 percent and 0.5 percent.
The FOMC also said in a statement that it planned to continue to raise rates from historically low levels but that it expected that “economic conditions will evolve in a manner that will warrant only gradual increases” in its benchmark rate.
Wednesday’s “action marks the end of an extraordinary seven-year period during which the federal funds rate was held near zero to support the recovery of the economy from the worst financial crisis and recession since the Great Depression,” Fed Chair Janet Yellen said at a press conference.
“It also recognizes the considerable progress that has been made toward restoring jobs, raising incomes and easing the economic hardship of millions of Americans,” she added.
The Fed also released new U.S. growth forecasts on Wednesday, leaving its forecast for 2015 gross domestic product growth unchanged at 2.1 percent but slightly raising its projection for 2016 GDP expansion to 2.4 percent, up from 2.3 percent in September.
The central bank, meanwhile, left its year-end unemployment forecast unchanged at 5 percent but slightly lowered its 2016 unemployment projection to 4.7 percent, down from 4.8 percent three months ago.
Wall Street reacted positively to the Fed’s policy decision, with the Dow ending up nearly 1.3 percent.
Washington, December 16,2015, EFE/Practica Español
Grammar notes: review of the prefixes