U.S. Fed raises interest rate to 2.5%

The U.S. Federal Reserve raised its benchmark interest rate a quarter-point but lowered its projections for future hikes.

As markets had expected, the central bank took the target range for its benchmark funds rate to 2.25% to 2.5%. The move marked the fourth increase this year and the ninth since it began normalizing rates in December 2015.

Officials now project two hikes next year, which is a reduction but still ahead of current market pricing of no additional moves next year, Reuters reported.

GDP is now seen as rising 3% for the full year of 2018, down one-tenth of a percentage point from September, and 2.3% for 2019, a 0.2% point reduction. However, officials took up their long-run estimates, to 1.9% from 1.8% in September.