WASHINGTON D.C. (FOX 11 / AP) - The Federal Reserve is raising a key interest rate for the first time in a year, reflecting a resilient U.S. economy and expectations of higher inflation. The move will mean modestly higher rates on some loans.
The Fed is signaling that additional rate increases will likely be made slowly as the economy improves and inflation edges closer to the Fed's 2 percent target.
The central bank is increasing its benchmark rate by a quarter-point to a still-low range of 0.5 percent to 0.75 percent. The Fed last raised the rate in December 2015 from a record low near zero set during the 2008 financial crisis.
President-elect Donald Trump's plans for tax cuts and infrastructure spending have led investors to expect that inflation will pick up in coming months.
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