Federal Reserve Statement

Here is the text of the Federal Reserve’s statement Wednesday on interest rates:

The Federal Open Market Committee decided today to raise its target for the federal funds rate by 25 basis points to 1.25%.

The committee believes that, even after this action, the stance of monetary policy remains accommodative and, coupled with robust underlying growth in productivity, is providing ongoing support to economic activity.

The evidence accumulated over the inter-meeting period indicates that output is continuing to expand at a solid pace and labor market conditions have improved. Although incoming inflation data are somewhat elevated, a portion of the increase in recent months appears to have been due to transitory factors.

The committee perceives the upside and downside risks to the attainment of both sustainable growth and price stability for the next few quarters are roughly equal. With underlying inflation still expected to be relatively low, the committee believes that policy accommodation can be removed at a pace that is likely to be measured. Nonetheless, the committee will respond to changes in economic prospects as needed to fulfill its obligation to maintain price stability.

In a related action, the Board of Governors approved a 25-basis-point increase in the discount rate to 2.25%.