The U.S. central bank is carefully raising interest rates against a brightening economic background that has perked up conditions for the nation’s lenders, said Federal Reserve Bank of Atlanta President Raphael Bostic.

After years of emergency-era monetary policy, Fed officials are now “in an increasing-rate environment, and are in the midst of a carefully-calibrated return to a more normal Fed footing, which includes the gradual reduction in our balance sheet,” Bostic, a voter this year on the Fed’s rate-setting panel, told a banking conference in Atlanta.

“Banks have anticipated the increase in rates and were really excited about the prospects of higher returns, keeping in mind the need to manage interest-rate risk.”

Fed officials saw stronger U.S. growth sustaining additional interest-rate increases, minutes of their January policy meeting released on Wednesday showed. Investors fully expect the Fed to raise rates at its March meeting according to pricing in interest-rate futures contracts, and are lining up with the Fed’s projection for a total of three hikes this year.

“Our most recent GDPNow estimate projects growth of 3.2 percent in the first quarter -- which is a lot more than it was last first quarter -- and so things continue to look up,” Bostic said, referring to the Atlanta Fed’s tracking model of gross domestic product. For banks, fourth-quarter results signal that “discounting the transitory effect of changes in the tax code, core earnings are solid and credit quality remains stable.”