The Federal Reserve on Wednesday raised its key interest rate for only the second time in a decade, by a quarter-point to 0.5%-0.75%.
The Fed last hiked the benchmark rate a year ago, but a winter economic slowdown global uncertainties prevented subsequent tightening, until now.
With the jobs market improving, inflation picking up, and U.S. stocks at record highs, policy makers ran out of reasons to delay any further.
"Information received since the Federal Open Market Committee met in November indicates that the labor market has continued to strengthen and that economic activity has been expanding at a moderate pace since mid-year," the Fed statement read.
Markets are expected to take today's rate hike in stride, but the outlook on interest rates for 2017 remains somewhat murky. The Fed's 'dot plots' now predict three rate hikes in 2017, one more than previously estimated.
"The Committee expects that, with gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace and labor market conditions will strengthen somewhat further," the Fed said.
"Inflation is expected to rise to 2 percent over the medium term as the transitory effects of past declines in energy and import prices dissipate and the labor market strengthens further."
Fed chair Janet Yellen took question from the press following the rate announcement.
She demurred when asked whether Trump's plans for fiscal stimulus and tax cuts resulted in the change in the rate hike outlook.
"I would say at this point that fiscal policy is not obviously needed to provide stimulus to get us back to full employment," she said.
There was no specific mention of President-elect Donald Trump in the Fed's official statement.
Trump has criticized the central bank as being a political tool of outgoing Obama administration, and will likely be displeased that the Fed has raised borrowing costs just as he prepares to take office.
If Trump tweets during Yellen's press conference, it may be taken as a sign that he intends to interfere with the typically non-partisan rate-setting process.
For comments and feedback: editorial@rttnews.com