Members of the Federal Open Market Committee agreed Wednesday to increase the federal funds rate by 25 basis points, after years of keeping it at zero to 0.25%. All members agreed with the decision, after seeing ongoing job gains and declining unemployment and inflation indicators.
“The economic recovery has clearly come a long way, although it is not complete,” Chairwoman Janet Yellen said at a news conference at the end of its two-day meeting.
Future rate changes are likely to be gradual and remain low, the members said. Given that uncertainty, “we are not suggesting any change in allocation strategy at this time,” said Tim Barron, chief investment officer for consultant Segal RogerscaseyRogerscasey.