Top Federal Reserve officials announced that they raised the target range of the U.S. central bank's key interest rate by 25 basis points after their final monetary policy meeting of 2016.

The monetary policy-setting Federal Open Market Committee voted unanimously to lift the target range for the federal funds rate to between 50 basis points and 75 basis points. "Job gains have been solid in recent months and the unemployment rate has declined," the committee said in its Dec. 14 statement, adding that it was raising its target rate "in view of realized and expected labor market conditions and inflation."

Financial markets had widely anticipated the move after Fed officials said in recent months that they expected financial conditions would likely soon justify another step in plans for a gradual normalization in interest policy following the bank's years-long near-zero rate environment. The December hike is the second raise in the key rate target in more than a decade.

Fed officials also noted in their statement that inflation measures were moving closer to their long-run 2% target. "Inflation has increased since earlier this year ... market-based measures of inflation compensation have moved up considerably," policymakers said, though they added that inflation measures were still running below target.

Committee members said they continue to expect a gradual pace of rate increases and noted that the policy remains accommodative, which they said would support "some further strengthening in labor market conditions and a return to 2 percent inflation."