The central bank last hiked its benchmark rate in March.
As financial markets had anticipated, the policymaking Federal Open Market Committee, or FOMC, increased its benchmark target by a quarter point. The new range will be 1 percent to 1.25 percent for a rate that currently is 0.91 percent.
This move followed gold futures spiking higher suddenly Wednesday morning, after reports raised concerns about the state of the economy.
A shooting near the nation's capital involving members of Congress also added to fears, sending investors into the safe-haven trade.
U.S. gold futures for August delivery traded about 0.07 percent lower near $1,268.60 an ounce as Fed chairwoman Janet Yellen spoke, after futures briefly traded up more than 1 percent. Earlier, futures hit a high of $1,284.60, the highest since Friday.