The Federal Reserve Open Market Committee said that it would raise its benchmark interest rate to .5% from .25%. This is the first time that the Fed has raised the rate since December 2008.

In determining the timing and size of future adjustments to the target range for the federal funds rate, the committee said it will assess realized and expected economic conditions relative to its objectives of maximum employment and 2% inflation. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments.

Information received since the committee met in October suggests that economic activity has been expanding at a moderate pace. Household spending and business fixed investment have been increasing at solid rates in recent months, and the housing sector has improved further; however, net exports have been soft.