The Latest on the Federal Reserve's monetary policy meeting (all times local):
Federal Reserve Chair Janet Yellen says she has not spoken with President Donald Trump about serving a second four-year term in office.
Yellen told reporters at a news conference, "So what I've said about my own situation is I fully intend to serve out my term as chair, which ends in early February."
She declined to say whether she would like to serve a second term. Former President Barack Obama nominated Yellen as Fed chair and her term is slated to end on February 3, 2018.
Reaction was muted on financial markets to the Federal Reserve's latest rate increase, which was widely expected by investors.
Bond yields didn't move much after the Fed's announcement at 2 p.m. The yield on the 10-year Treasury note was 2.12 percent, the same as shortly before the statement came out. That rate is closely tied to interest rates on mortgages and other kinds of loans.
The Standard & Poor's 500 index, the benchmark that professional investors follow, likewise wasn't changed much either. It was down a point to 2,439.
The Dow Jones industrial average was up 22 points, or 0.1 percent, to 21,352, little changed from before the announcement.
Federal Reserve policymakers lowered their forecasts for inflation and unemployment, and continued to predict they would raise rates once more this year.
Fed officials now expect the U.S. unemployment rate to end the year at 4.3 percent, down from the 4.5 percent they predicted in March. They are just catching up with reality: The jobless rate has dropped with unexpected speed — to a 16-year-low 4.3 percent in May.
The policymakers now expect their favored measure of inflation to come in at 1.6 percent this year, down from the 1.9 percent they expected in March and below their 2 percent target. Annual inflation is running at 1.7 percent.
They increased their projections for economic growth this year to 2.2 percent from the 2.1 percent they forecast in March. They continue to expect the economy to grow 2.1 percent next year and 1.9 percent in 2019. These rates are well below the Trump administration growth goals of 3 percent a year.
The Fed raised the short-term rate it controls to a range of 1 percent to 1.25 percent, the second hike this year and the third in six months. The policymakers signaled that they still expect to raise rates once more in 2017.
The Federal Reserve is hiking a key interest rate for the second time this year and is planning to reduce the size of its $4.5 trillion balance sheet as well.
Fed officials voted 8-1 to raise the federal funds rate to a range of 1 to 1.25 percent. The rate sets what banks can charge each other for overnight loans and influences the availability and flow of money in the U.S. economy. Only Neel Kashkari, president of the Minneapolis Fed bank, opposed the increase.
The Fed also says it expects to begin reducing its balance sheet this year "provided the economy evolves broadly as anticipated." This would reduce its holdings of Treasury and mortgage-backed bonds, which they acquired in the wake of the financial crisis to support economic growth. Fed officials project growth of roughly 2 percent in 2017.
The Federal Reserve is expected to announce plans to lift a key interest rate at 2 p.m. Eastern time.
Fed officials are wrapping up their two-day June meeting. Most analysts believe the Fed will raise the federal funds rate — what banks charge each other for short-term loans — for the second time this year. Fed officials previously increased the rate in March to a range of 0.75 to 1 percent. There was only one rate increase in both 2015 and 2016.
Financial markets have been anticipating the increase. U.S. stock markets were relatively flat through afternoon trading, while the yields on 10-year Treasury notes had fallen to 2.11 percent.
World stock markets and the dollar are firm ahead of an expected interest rate increase by the U.S. Federal Reserve.
Germany's DAX index is up 0.4 percent and Britain's FTSE 100 0.1 percent. In Asia, Japan's Nikkei 225 ended the day marginally lower. Some gains are expected on Wall Street later, with the futures for both the Dow and S&P 500 up 0.1 percent.
In currency markets, the dollar is up to 110.22 yen from Tuesday's 110.04 yen. It is roughly flat against the pound, at $1.2758.
The U.S. central bank is widely predicted to nudge up its benchmark rate by a quarter point on Wednesday, to a range of 1 percent to 1.25 percent.