Fed Hikes Rates for First Time in Three Years, but Committee Forecasts More to Come

The Federal Reserve has increased interest rates for the first time in three years. Sixteen out of eighteen policymakers who voted on it do not think one hike was enough.

Gold and silver prices initially rose, but later gave back their gains after the Fed's decision. The FOMC voted unanimously to raise the federal funds target range by 25 basis points, from 3.50%-3.75% to 3.75%-4.00%. This move was expected, as inflation remains above the 2% target.

The dot plot shows that twelve out of eighteen participants predict at least one more quarter-point increase before year-end, with an average landing at 4.125%. Four went further and projected a half-point of additional tightening.