The Federal Reserve began its much anticipated belt-tightening effort last week by ratcheting up its target for short-term interest rates for the first time in four years.

As widely expected, the Fed, in a unanimous vote, raised its short-term lending rate to 1.25% from a 46-year low of 1%. In a statement, the Fed made known its plans to continue to push rates higher "at a pace that is likely to be measured." In other words, the Fed intends to raise rates in increments of 25 basis points.

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