Reference no: EM132405879

For the first time since 2006, the Federal Reserve voted to raise interest rates by a one-quarter percentage point in December 2015. Prior to this increase, interest rates had remained between the 0.00% - 0.25% range, an area called "the zero lower bound." The increase moved rates to the 0.25% - 0.50% range. Why would the Fed want to raise interest rates? What effects does an increase in interest rates have in the rest of the economy? What are the methods the Fed could use to achieve this rate increase?