The Federal Reserve raised interest rates for the first time inalmost a decade in a widely telegraphed move while signaling thatthe pace of subsequent increases will be “gradual” and in line withprevious projections.

The Federal Open Market Committee (FOMC) unanimously voted toset the new target range for the federal funds rate at 0.25 percentto 0.5 percent, up from zero to 0.25 percent. Policy makersseparately forecast an appropriate rate of 1.375 percent at the endof 2016, the same as September, implying four quarter-pointincreases in the target range next year, based on the median numberfrom 17 officials.

“The committee judges that there has been considerableimprovement in labor market conditions this year, and it isreasonably confident that inflation will rise, over the mediumterm, to its 2 percent objective,” the FOMC said in a statementWednesday following a two-day meeting in Washington. The Fed saidit raised rates “given the economic outlook, and recognizing thetime it takes for policy actions to affect future economicoutcomes.”