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The Federal Open Market Committee, at the close of its two-day policy-setting meeting, today said it will raise the federal funds target rate by a quarter-point to a range of 1 to 1.25 percent.

"The actions taken by the Fed reflect confidence in the labor market and a perception that global risks have declined in the first six months of the year," said NAFCU Chief Economist and Director of Research Curt Long. "Nevertheless, the outlook for the second half is uncertain.

"Inflation has slowed recently and the debt ceiling debate poses political risk," he added. "But with the Fed stating its intentions to start reducing the size of the balance sheet this year, it is offering a clear vote of confidence for the economy."

The FOMC said in its statement that it "currently expects to begin implementing a balance sheet normalization program this year, provided that the economy evolves broadly as anticipated."

The FOMC last raised the federal funds target rate to a range of 0.75 to 1 percent in March.

The committee's revised projections are three quarter-point rate hikes in 2017 (including the ones announced today and in March), three in 2018 and three to four in 2019. The FOMC will meet again July 25-26.

NAFCU will also issue a NAFCU Macro Data Flash report to members today with more information on the FOMC's actions.