The rate hike will affect consumers on numerous fronts, ranging from interest rates on credit cards and mortgages to the returns on investments and savings accounts, but experts say the impacts will be modest to begin with.

It was the first increase in the federal funds rate — the percentage that banks charge one another for short-term loans — since June 2006.

The move shows that the Fed is confident that the U.S. economy has improved a great deal since the financial crisis. Investors will pay close attention to what the Fed says about its future plans on interest rate policy.

Most observers expect the Fed will forecast a series of gradual rate hikes over the next year that will not significantly crimp strong consumer demand, or cool a housing market that has also propped up recent growth.