By Ovunc Kutlu
NEW YORK (AA) - The Federal Reserve increased its benchmark interest rate as expected, the Federal Market Open Committee (FOMC) announced Wednesday.
In its first meeting under the new Fed Chair Jerome Powell, committee members voted unanimously to raise the federal funds rate by 25 basis points to a target range of 1.5 percent to 1.75 percent.
The increase marked the first hike for the year and the sixth since December 2015. The central bank made three rate hikes last year under the previous head Janet Yellen.
"The stance of monetary policy remains accommodative, thereby supporting strong labor market conditions and a sustained return to 2 percent inflation." the FOMC said in a statement.
It said the economic outlook has strengthened in recent months, and thus the committee increased growth projections for U.S, economy.
The Fed now expects the economy to expand 2.7 percent in 2018 and 2.4 percent next year, instead of the previous estimates of 2.5 percent and 2.1 percent, respectively.
Unemployment rate projections were also lowered down to 3.8 percent for 2018 and 3.6 percent for 2019. Previous estimates were for 3.9 percent for both years.