The Federal Reserve on Wednesday raised interest rates for the third time this year, a widely expected move that is likely to frustrate President TrumpDonald TrumpKinzinger welcomes baby boy Tennessee lawmaker presents self-defense bill in 'honor' of Kyle Rittenhouse Five things to know about the New York AG's pursuit of Trump MORE.
The Fed board voted unanimously to raise rates by 0.25 percentage point Wednesday to a 2-2.25 percent target range as the central bank attempts to prevent a tight job market from causing excessive inflation.
The central bank hiked rates in March and June, and is likely to do so again in December.
Fed officials are aiming to bring interest rates back to historically neutral levels without stifling the growing economy. Raising rates too quickly could cut short the U.S. recovery from the 2008 recession, while waiting too long could spark rapid price increases and dangerous financial market bubbles.
“This gradual return to normal is helping sustain this strong economy," said Federal Reserve Board Chairman Jerome Powell at a Wednesday press conference.
The Fed also indicated that the bank would move away from low "accommodative" interest rates, which Powell said reflects that success of the central bank's monetary policy.
The Fed said in its Wednesday statement that data showing a strong and stable economy made the case for a September rate hike. U.S. unemployment is a near-record low of 3.9 percent, and the economy added an average of 185,000 jobs each month since June.
The Fed projected one further rate increase in 2018 and an average of three hikes in 2019. Four Fed officials predicted two hikes next year, another four projected three hikes, and four more officials expected four hikes.
Fed officials also upgraded their projection for annual gross domestic product growth, bumping their forecast to 3.1 percent growth from their 2.8 percent prediction in June.
The rate hike is a welcome move for Republicans and right-leaning economists who’ve expressed fears of impending inflation. The rate of price increases has steadily moved closer to the Fed’s 2 percent annualized target throughout the year, and the GOP is notoriously hawkish on inflation.
But the move risks angering Trump, who’s blasted Powell for leading a series of rate hikes the president says will hurt the U.S. economy.
Trump has said he’s “not thrilled” with Powell and the Fed, arguing that rate hikes would slow the U.S. economy and hinder the administration’s efforts to curb unfair trade practices committed by China.
The president was panned by lawmakers in both parties for attempting to infringe on the Fed’s independence, and later walked back some of his criticism.
Top Trump administration economic officials such as Treasury Secretary Steven MnuchinSteven MnuchinSuspect in Khashoggi murder arrested The Hill's Morning Report - Presented by Facebook - Biden to tackle omicron risks with new travel rules Mnuchin and McConnell discuss debt limit during brief meeting MORE and Council of Economic Advisers Chairman Kevin Hassett have praised Powell and insisted the White House would not encroach on the Fed.
--Updated at 2:37 p.m.