WASHINGTON — The Federal Reserve signaled its confidence in the U.S. economy by raising a key interest rate Wednesday for a third time this year, forecasting another rate hike before year’s end and predicting it will continue to tighten credit into 2020 to manage growth and inflation.

The Fed lifted its short-term rate — a benchmark for many consumer and business loans — by a modest quarter-point to a range of 2 percent to 2.25 percent. It was its eighth hike since late 2015. The central bank also stuck with a previous forecast for three more rate hikes in 2019.

In a statement, the Fed dropped phrasing it had long used that characterized its policy as “accommodative,” that is, favoring low rates. The Fed had used variations of that pledge in the seven years that it kept its key rate at a record low near zero and over the past three years in which it’s gradually tightened credit.

By removing that language, the Fed may be signaling its resolve to keep raising rates. In a news conference after its meeting, Chairman Jerome Powell said the removal of the “accommodative” language did not amount to a policy change. “Our economy is strong,” Powell declared at the start of his news conference.

The Fed’s actions and its updated economic forecasts Wednesday had been widely anticipated. Initially, there was little reaction in the stock or bond markets. In the afternoon, stocks sold off, and major indexes closed modestly lower.

“The Fed stuck to script today, pushing ahead with another rate hike,” said Michael Pearce, senior U.S. economist at Capital Economics.

But Pearce added, “Our view is that officials are still underestimating just how quickly the economy is likely to lose momentum next year.”