He added, however, that the Fed was raising rates “because we’re doing so well.”

The Fed’s decision, announced after a two-day meeting of its Federal Open Market Committee, which sets monetary policy, represents the eighth time that the Fed has raised interest rates since the 2008 financial crisis, and the third time this year. Another increase is expected in December.

The Fed described economic conditions as “strong.” It predicted that growth this year could top 3 percent, before slowing in coming years. Unemployment remains low, inflation remains around the 2 percent pace the Fed regards as optimal, and the pace of investment has increased, it said.

For the first time in recent years, the Fed did not describe monetary policy as “accommodative,” indicating that its benchmark interest rate is rising back toward a level the Fed regards as neutral, meaning that monetary policy is neither stimulating nor restraining economic growth.

Mr. Powell emphasized, however, that the change in wording was not intended to signal any change in policy. He said monetary policy remained accommodative at the moment.



A number of Mr. Powell’s colleagues have argued publicly that the Fed most likely needs to raise rates to a level that begins to restrict economic activity. The Fed warned last year that there was no need for a tax cut in the midst of a steady economic expansion. Mr. Trump and Congress ignored that advice, cutting taxes and increasing spending. The result has been a short-term increase in economic growth, which some Fed officials fear could lead to higher inflation.