(CN) - The Federal Reserve raised its key interest rates on Wednesday, the third such hike in 2017 and likely the last under outgoing Fed Chairwoman Janet Yellen.
The Federal Open Markets Committee raised benchmark interest rates a quarter of a point, to between 1.25 percent and 1.5 percent.
In explaining its decision, which had been widely expected, the committee said since it last met in November the U.S. labor market has continued to strengthen and economic activity has been rising at a solid rate.
"Averaging through hurricane-related fluctuations, job gains have been solid, and the unemployment rate declined further.," the committee said. "Household spending has been expanding at a moderate rate, and growth in business fixed investment has picked up in recent quarters.
"On a 12-month basis, both overall inflation and inflation for items other than food and energy have declined this year and are running below 2 percent," it added.
The committee said it believed raising the interest rates at this time would both ensure stability in the economy and foster continued growth while keeping inflation under control.
The Fed last hiked rates in June as part of an effort to peel back the massive cuts meant to boost the economy though the 2008 recession.
The Fed is unlikely to raise rates again under Yellen, a Democrat who is set to leave the bank in February upon the confirmation of Fed Governor Jerome Powell as the next chairman.
Powell, a Republican, unanimously voted with Yellen on a slow increase in interest rates during his five years on the Fed board since 2012.
The Fed board also said it continues to expect to raise rates three times in 2018. Powell is likely to continue Yellen's moderately paced rate hikes, though low inflation or the effects of a successful GOP tax plan could force him to change course.