In a decision fueled by steady job gains, growing business confidence and strong economic growth, the U.S. Federal Reserve raised interest rates earlier this week, Reuters reported. The interest rate range grew by 25 basis points from the original forecast, bringing it from 0.75 percent to 1.00 percent. Furthermore, the source said that Fed officials still expect to see two additional rate increases this year, followed by three more in 2018.
The Fed's recent estimates signal an economic growth of 2.1 percent in 2017, remaining consistent with December projections. At 3 percent, the long-run interest rate forecast was also unchanged.
"With gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace," the Fed Committee said, Reuters reported.
By the end of the year, Fed officials anticipate the unemployment rate to stay at 4.5 percent and core inflation to rise to 1.9 percent.
According to Bloomberg, this move suggests the Fed expects that maximum use of labor resources - now at 4.7 percent - will exceed estimates. Additionally, the Committee said that the "near-term risks to the economic outlook appear roughly balanced."