To the surprise of almost no one, Federal Reserve policymakers decided to raise short-term US interest rates for the first time in a year. The Fed increased its benchmark interest rate to range of 0.50 per cent to 0.75 per cent from 0.25 per cent to 0.50 per cent. The rate is still extraordinarily low.The Fed said that the American job market looks strong and the overall economy is “expanding at a moderate pace.” The unemployment rate fell in November to a nine-year low 4.6 per cent. And the economy expanded from July through September at a 3.2 per cent annual pace, fastest in two years. The Fed expects inflation to edge up and closer to its 2 per cent annual target. Turning to US investments, they are likely to drive up the value of the dollar, which is already near a 14-year high. A dearer dollar makes US products costlier in foreign markets and hurts American exporters. Fed policymakers expect to raise rates three times next year.