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The U.S. Federal Reserve has hiked its benchmark interest rate for the first time in a year — and for only the second time in a decade — as U.S. job growth gathered steam.

In a statement, the Fed said job gains in recent months have been solid, while consumer spending has been rising moderately. The Fed therefore raised the upper bound of its trend-setting federal funds rate to 0.75 per cent, up from 0.5 per cent.

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“This is a very modest adjustment in the path of the federal funds rate,” Federal Reserve chair Janet Yellen told a press conference Wednesday.

The last time the U.S. Fed’s Open Market Committee increased its benchmark rate was December 2015. Prior to that, you’d have to go back to June 2006 to find an instance in which the Fed hiked, rather than cut or held, its federal funds rate.

“In view of realized and expected labor market conditions and inflation, the committee decided to raise the target range for the federal funds rate to 1/2 to 3/4 per cent,” the committee said in a statement. All 10 members of the committee voted for the increase.

The Fed is forecasting that the U.S. unemployment rate will end 2017 at 4.5 per cent. That’s slightly below a previous year-end forecast of 4.6 per cent. The current rate is already at 4.6 per cent.