2017.03.1514:11:00UTC+00Fed Announces Rate Hike, Sees Two More In 2017 -- Update

As expected, the Federal Reserve on Wednesday raised its benchmark interest rate in response to the improving economy. The Fed has lifted its target rate by a quarter point to a range of 0.75% to 1%.

Earlier this month, Fed Chair Janet Yellen telegraphed today's action by saying the Fed would raise rates barring any unpleasant economic surprises.

Since then, data has shown the unemployment rate fell to 4.7% in February, while core consumer prices (stripping out volatile food and energy) were up by 2.2% compared to a year ago, in line with the Fed's inflation target.

The Fed said "the labor market has continued to strengthen and that economic activity has continued to expand at a moderate pace."?

In addition to offering a modest rate hike today, the Fed said it still projects only two more rate hikes in 2017, three in 2018 and three in 2019. This is unchanged from the prior forecast in December.

Analysts thought the Fed might signal three more this year, but policymakers need details from the Trump administration about its tax reform and fiscal spending plans.

Also, the Fed is sticking to its 1.9% PCE inflation forecast for 2017.

Somewhat unexpectedly, the vote to raise rates was not unanimous. Neel Kashkari of the Minneapolis Fed dissented in favor of keeping rates on hold, but no reason was offered.

Fed Chair Janet Yellen is scheduled to hold a press conference at 2:30 p.m..