In December, the Committee judged that these two criteria had been satisfied and decided to raise the target range for the federal funds rate 1/4 percentage point, to between 1/4 and 1/2 percent. 2  BIS central bankers’ speeches  This increase marked the end of a seven-year period during which the federal funds rate was held near zero.
The Committee did not adjust the target range in January. The decision in December to raise the federal funds rate reflected the Committee’s assessment that, even after a modest reduction in policy accommodation, economic activity would continue to expand at a moderate pace and labor market indicators would continue to strengthen.