The Committee judges that there has been considerable improvement in labor market conditions this year, and it is reasonably confident that inflation will rise, over the medium term, to its 2 percent objective. Given the economic outlook, and recognizing the time it takes for policy actions to affect future economic outcomes, the Committee decided to raise the target range for the federal funds rate to 1/4 to 1/2 percent. The stance of monetary policy remains accommodative after this increase, thereby supporting further improvement in labor market conditions and a return to 2 percent inflation.
http://www.federalreserve.gov/newsevents/press/monetary/2015...
> exhaustion of the Old Age & Survivors Trust Fund is in 2035, not 2029
Social Security’s combined reserves likely will be fully depleted by 2034, according to the trustees’ intermediate forecast. The disability-insurance trust fund could run dry as soon as the end of 2016, while the old-age and survivors’ fund is expected to be depleted in 2035 – assuming it’s not tapped to backfill the disability fund. (The Congressional Budget Office, in a separate report that uses somewhat different demographic assumptions, projects that the disability fund will be exhausted in fiscal 2017 and the old-age and survivors’ fund in calendar 2031; if the funds are combined, they would be exhausted in calendar 2029.) The exact depletion dates depend, of course, on future demographic and economic trends. After the reserves are exhausted, the system still will be receiving tax revenue, but it will only be enough to pay about three-quarters of scheduled benefits – unless Congress changes the benefit formulas, raises the payroll tax, or makes other changes such as raising the cap on taxable wage income (currently $118,500).
http://www.pewresearch.org/fact-tank/2015/08/18/5-facts-abou...
Raising interest rates generally lowers inflation. The Fed recently raised interest rates because it thought the danger of deflation had receded as inflation had begun to increase (though inflation remains below the 2% target.)
The Federal Reserve is not on a "quest" to "raise interest rates and inflation", it is raising interests rates not as a goal of its own, but as a means to restrain, rather than raise, inflation. (h/t to laurencerowe for catching the dumb mistake I made earlier here by reversing the effect sought -- the correction actually makes reality farther from "raise interest rates and inflation" than my initial response.)
And even with rates much higher than any that the Fed is likely to raise them to between now and 2020, new government debt has been fairly cheap. Not as cheap as it is now, but not particularly expensive.
Further, if it is more expensive to issue new government debt, than the returns on the Trust Fund will be greater, and it will not be exhausted as soon. (In fact, the "low cost" alternative scenario -- in which Social Security is solvent as far out as projections go -- is, compared to the intermediate projection, based on higher interest rates, higher inflation, and higher employment [the latter of which is one of the factors which lead the Fed to seek higher interest rates, since balancing inflation against employment is a big part of what they do]. So the Fed being on that "quest" is, arguably, a positive sign for Social Security.)
(Anyhow, the most recent -- 2015 Trustees Report -- intermediate projection is for exhaustion of the Old Age & Survivors Trust Fund is in 2035, not 2029.)