Fed hikes key rate, citing “strong” economy

The Federal Reserve on Wednesday raised a key interest rate for the third time this year, indicating the central bank’s view that the economy is on solid ground.

“Job gains have been strong, on average, in recent months, and the unemployment rate has stayed low. Household spending and business fixed investment have grown strongly,” the Fed’s rate-setting body said in a statement that used a variant of the word “strong” four times. 

The target federal funds rate is now between 2 and 2.25 percent. Most economists expect the Federal Open Market Committee to again hike rates in December.

While rates are still low historically, investors worry that a faster-than-expected rise in borrowing costs would unsettle markets and halt what’s become the longest bull market for U.S. stocks on record.

Fed Chairman Jerome Powell is scheduled to speak at press conference at 2:30 p.m. Eastern time to explain the rate hike.

— The Associated Press contributed reporting. This is a developing story.