Photo via Wikimedia/AgnosticPreachersKid

Photo via Wikimedia/AgnosticPreachersKid

The Federal Reserve has raised its key interest rate from a range of 0% to 0.25% to a range of 0.25% to 0.5%.

This is the first rise in U.S. interest rates since 2006.

The Fed held its federal-funds rate near zero for seven years. This monetary policy began at the height of the recession to help stimulate the economy and improve the housing market.

The Fed's Committee said there has been considerable improvement in the labor market conditions this year, and it's reasonably confident that inflation will rise to its 2% objective, according to a Federal Reserve press release. 

"The Committee currently expects that, with gradual adjustments in the stance of monetary policy, economic activity will continue to expand at a moderate pace and labor market indicators will continue to strengthen," according to the press release.