Federal Reserve announced an increase in the Federal Funds

The Federal Reserve announced an increase in the Federal Funds interest rate for the first time in nearly a decade Wednesday, following a two-day Federal Open Market Committee member meeting. The target range is now 0.25% to 0.50% and will take effect on Thursday, Dec. 17th

Yellen said the members of the FOMC will monitor the impact their actions may have on markets in the short term. This will give the Fed the necessary tools to use in the event their actions have an unforeseen negative impact on the economy, she added.

In a statement released by the committee following the FOMC meeting, which ended Wednesday, the Fed cited the decline in energy prices and the prices of non-energy imports for keeping inflation below the committee’s 2% longer-run objective. Additionally, the committee report expressed confidence that the medium term will see the 2% objective come to fruition.

Trade organizations and industry leaders expelled their collective breaths when the announcement was made.

“Finally, we can all get back to work now and quit speculating on when rates will eventually rise,” CUNA Chief Economist Bill Hampel said in a statement.

NAFCU Chief Economist Curt Long added, “As far as credit unions are concerned, our forecast is for continued growth in lending in 2016. Households are in a strong position with low unemployment, falling gas prices, low debt service costs and early signs of wage growth.”

In response to the question of when the next rate raise could be expected, Yellen said she would not provide a formula for anticipating an additional rate raise, but stated the FOMC will continue to look for market improvements in employment, labor participation rates and wage growth.

The two-day meeting concluded the FOMC’s meetings for the year. The next one is scheduled for Jan. 26 and 27, 2016.