The US central banks interest rate cut is the first step towards an inflation target for the US.
The Federal Reserve said it would raise the benchmark federal funds rate by 0.25 percentage points from a range of 0.1 percent to 0.50 percent for the second quarter.
The target was set in a statement on Thursday.
The decision is a first step toward a rate increase and a step towards a gradual recovery.
The Fed raised its benchmark rate by a quarter-point on Wednesday.
The Federal Open Market Committee also raised its key interest rate for the first time in six years by a full percentage point on Thursday morning.
The rise in the benchmark rate will have little impact on the US economy, as inflation is expected to remain at around the 2 percent level.
The dollar has strengthened against the euro, while the euro has weakened against the dollar, helping to support the dollar and the euro against the US dollar.
However, the dollar’s strength has also contributed to some concerns over the global economy.
US economic growth is expected at an annualised rate of just 0.3 percent this year, the lowest level in more than three decades, the Federal Reserve reported on Thursday in a report.
The United Kingdom’s economy is expected by the central bank to expand by just 0,2 percent this quarter, down from the 0.4 percent it forecast in March.