Federal Reserve did not let the analysts down in their expectations of another rate hike in its December 14 meeting, bringing it up 25 basis points to 2.25. The rise in the Fed funds rate was accompanied by a hike in the symbolic discount rate that Fed uses to charge banks for overnight loans to 3.25.

The Fed statement reveals that its officials view risks to the U.S. economy as balanced, although the Consumer Price index has been edging up, even with the exclusion of energy prices. The weaker dollar also begins to factor in raising the prices for imported goods. “Balanced” in this case refers to the balance between the possibility of weak growth and inflationary pressures.

"With underlying inflation expected to be relatively low, the committee believes that policy accommodation can be removed at a pace that is likely to be measured," the central bank said in a statement.

The economy shows positive signs of recovery with annual growth rate for the third quarter at 3.7% and the job growth averaging 178,000 in the past 3 months. Fed projects the same expansion pace to last into the next 18 months, leaving some economists disappointed as they anticipated a bolder statement.

"Output appears to be growing at a moderate pace despite the earlier rise in energy prices, and labor market conditions continue to improve gradually," the Fed’s statement said.

Following Fed’s decision, several banks raised prime lending rates charged on loans to the most reliable customers. However, some of the borrowing costs to consumers such as mortgage rates are unlikely to change as they are linked with yields on government bonds that remained relatively stable.

Right now markets are trying to figure out what will happen in the next meeting scheduled for early February. In fact, as most analysts predict that the “measured” and “accommodative” rate policy will lead to another quarter-percent rise, markets have already factored this probability in.

"There’s nothing in here to suggest that they’re going to change from a measured pace to be more aggressive," said Stuart Hoffman, chief economist at PNC Financial Services Group. "On the other hand, there’s also nothing in the statement to suggest that they’re ready to pause or stand pat," he added.

In an important move for the markets, the Fed disclosed the intention to speed up the release of minutes from its policy sessions allowing markets to gain insight into the Fed discussions three weeks after the meeting as opposed to the six weeks they took before.

``It has been so long overdue that it boggles the mind,’’ said Paul McCulley, of Pacific Investment Management Co., manageing the world’s largest bond fund. ``Allowing us as a marketplace to anticipate requires we have information of the last decision before we forecast the next decision. I would put this in the category of glasnost.’’

Market participants have welcomed the promise of more transparency in the markets.