The U.S. dollar. [Photo: cngold.com]

The US Federal Reserve has raised interest rates for the first time in seven years.

Federal Reserve Chair Janet Yellen says the decision reflects the committee's confidence that the economy will continue to strengthen.

"The Federal Open Market Committee decided to raise the target range for the federal funds rate by one-quarter percentage point, bring it to one-quarter to one-half percent. This action marks the end of an extraordinary seven year period during which the federal funds rate was held near zero to support the recovery of the economy from the worst financial crisis and recession since the Great Depression."

The US unemployment rate is at a robust five percent.

But in addition to maximizing employment, the Fed is responsible for maintaining stable prices.

Inflation remains below the Fed's two percent target.