THE FEDERAL RESERVE

takes note of a resilient U.S. economy by raising its benchmark interest rate for the second time this year and signaling that it may step up its pace of rate increases.

— The Federal Reserve took note of a resilient U.S. economy Wednesday by raising its benchmark interest rate for the second time this year and signaling that it may step up its pace of rate increases.

The Fed now foresees four rate hikes this year, up from the three it had previously forecast. The action means consumers and businesses will face higher loan rates over time.

The central bank raised its key short-term rate by a modest quarter-point to a still-low range of 1.75 percent to 2 percent. 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 reaching the Fed’s 2 percent target.

Economists said the Fed left little doubt that it’s prepared to increase the pace of its credit tightening to guard against high inflation later on.

“The labor market is getting tighter, and price pressures are picking up,” said Greg McBride, chief financial analyst at Bankrate.com. “The Fed is prepared to be quicker about pushing rates higher.”

It was the Fed’s seventh rate in WASHINGTON crease since 2015, and it followed an increase in March this year.

At a news conference, Fed Chairman Jerome Powell sought to portray the Fed’s actions as evidence mainly that the economy is doing well and not that the central bank is eager to accelerate its rate increases. “The economy is in great shape,” Powell said.

He acknowledged that the Fed is hearing concerns from some business executives about the Trump administration’s combative trade policies, including anecdotal cases in which companies have postponed hiring or major purchases.

But Powell added, “For now, we don’t see that in the numbers at all.”

Trump has slapped tariffs on steel and aluminum imports, has threatened additional tariffs on Chinese imports and has directed his administration to consider further duties on imported cars. Those moves have inflated steel and aluminum costs.

A gradual rise in inflation is coinciding with newfound economic strength. After years in which the economy expanded at roughly a tepid 2 percent annually, growth could top 3 percent this year. Consumer and business spending is powering the economy, in part a result of the tax cut President Donald Trump pushed through Congress late last year. Unemployment has reached 3.8 percent — not since 1969 has the jobless rate been lower.

The Fed’s pace of rate hikes for the rest of the year could end up reflecting a tug of war between a sturdy economy and the risks to growth, including from a potential trade war that could break out between the United States and such key trading partners as China, the European Union, Canada and Mexico.

All those countries have vowed to retaliate against any U.S. tariffs with their own penalties against U.S. goods.