Fed Increases Rates Quarter Point

The Federal Reserve's Open Market Committee on Tuesday increased short-term interest rates by 25 basis points, its 12th consecutive quarter-point rate hike since June 2004. The move raises the Federal funds target rate, which determines the overnight interbank lending rate, to 4.0 percent, its highest level since April 2001.

The central bank policymakers described monetary policy as still "accommodative" and also kept the wording "measured" in the accompanying policy statement, suggesting the Fed likely will continue ratcheting up interest rates in small steps.