The Federal Reserve Bank raised its benchmark interest rate by a quarter point on Wednesday and projected two more rate increases to come this year.
In a widely expected move, the central bank’s Federal Open Market Committee voted to increase the short-term rate to the expected range of 0.75 percent to 1 percent.
The decision was approved by a 9-1 vote, with the sole dissenting vote coming from Neel Kashkari, head of the Federal Reserve regional bank in Minneapolis.
The increase comes against a backdrop of rising confidence in the economy. Fed Chair Janet Yellen said in a press conference after the vote that economic indicators were on an expected positive path, with unemployment going down, the labor market strengthening and inflation moving up to the Fed’s target of 2 percent.
Talking about the message this hike sends to consumers, Yellen said that “the simple message is that the economy is doing well.”
Answering some concerns that the hike may have come too soon without enough corresponding wage growth, Yellen said that while she believes there is room for more wage growth, low productivity is a major factor tied into wage increases.
“Our objectives are maximum employment and inflation,” Yellen said.