The Federal Reserve raised the target range for the federal funds rate to 2% to 2-1/4% in view of realized and expected labor market conditions and inflation.

Information received since the Federal Open Market Committee met in August indicated the labor market has continued to strengthen and that economic activity has been rising at a strong rate.

Job gains have been strong, on average, in recent months, and the unemployment rate has stayed low. Household spending and business fixed investment have grown strongly. On a 12-month basis, both overall inflation and inflation for items other than food and energy remain near 2%. Indicators of longer-term inflation expectations are little changed, on balance.

Consistent with its statutory mandate, the committee seeks to foster maximum employment and price stability. The committee expects further gradual increases in the target range for the federal funds rate will be consistent with sustained expansion of economic activity, strong labor market conditions, and inflation near the committee’s symmetric 2% objective over the medium term. Risks to the economic outlook appear roughly balanced.