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Officials penciled in a total of four rate increases for this year, up from a projection of three increases at their March meeting.

According to CNBC, the Reserve released new data this week showing the GDP forecast rose to almost 3%, up from the previous predictions of 2.7%.

"Economic activity has been rising at a solid rate", the FOMC said in its statement.

The strong economic data comes just hours after the US Treasury confirmed it had taken in a record-smashing tax haul in the first fiscal months of 2018; breaking previous highs by $50 billion in personal income tax. With higher interest rates, this means that real interest rates will push higher.

The already historically low unemployment is projected to fall even further, ending the year at 3.6 per cent before settling at 3.5 per cent in 2019 and 2020.

Wednesday's action, which was widely expected, was the second Fed rate hike this year - and the seventh since it began boosting them in 2015. Unemployment, now at an 18-year low of 3.8 percent, would drop to 3.6 percent by year's end and to 3.5 percent in 2019 and 2020 - levels not seen in 49 years.

That is a welcome step-up from the roughly 2-percent growth averaged throughout the recovery, which was plagued by a series of crises overseas and uncertainties at home, delaying the Fed's tightening plans. Rates for vehicle loans and variable-rate mortgages are also likely to increase.

Also notable was that the Fed deleted about 80 words of its statement that said it expected the economy to "evolve in a manner that will warrant further gradual increases" in rates.

While a few items remain on the US central bank's wish list, such as bigger gains in wages and productivity, the main goals of stable prices and full employment are effectively met.

"Household spending has picked up while business fixed investment has continued to grow strongly", the Fed said. The Fed expects inflation higher than 2% over the next two years, according to its latest projections. Goods prices were up 1.0% last month after a flat reading in April, with energy 4.6% higher versus the prior 0.1% gain, with food prices bouncing 0.1% from -1.1% previously.

"Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability".

They expect the core inflation rate to rise to roughly 2% this year. With the economy now nine years into an expansion, the move reflects the steadiness of growth, the job market's strength and inflation that's finally nearing the Fed's target level. The stance of monetary policy remains accommodative, thereby supporting strong labour market conditions and a sustained return to 2 per cent inflation. That reflects the fact that the United States recovery after the crisis has been stronger, and inflation is getting closer to the Fed's target.