The Federal Reserve raised interest rates by 25 basis points, lifting the benchmark federal funds rate to a range of 5.00 and 5.25 percent, the highest level since September 2007.
The vote to raise rates by a quarter point was unanimous, according to a statement from the Federal Open Market Committee (FOMC).
Markets had mostly priced in a rate hike, so investors were more focused on forward guidance than the May policy decision.
The post-meeting statement opened the door to a rate pause after it removed “the Committee anticipates that some additional policy firming may be appropriate” sentence.
“In determining the extent to which additional policy firming may be appropriate to return inflation to 2 percent over time, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments,” the Fed said in a statement….