They did it. Federal Reserve policy members voted to raise short term interest rates for the first time since 2006, lifting the discount rate by a quarter point. At a news conference following the conclusion of the FOMC’s two-day meeting, Yellen stated that an improving labor market was a factor in the decision, which was unanimous. The Fed moved even though inflation has remained low, and below the Fed’s target rate. But Yellen explained that if the FOMC were to delay raising rates for too long, it might have to tighten policy abruptly at some point to keep the economy from overheating. She said the Fed expects gradual rate increases from here.
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