The Federal Open Market Committee voted unanimously to raise the benchmark federal funds rate by 25 basis points to a range of 1.75 percent to 2 percent.
The panel said it expects further gradual rate increases, with updated projections indicating there will be two more this year.
The Fed also increased its projected 2018 growth in the gross domestic product, from 2.7 percent to 2.8 percent, and anticipated stronger improvements to the unemployment rate.
Read FOMC Statement
Read Fed Projections