The Federal Reserve believes that the United States is currently at, or above full employment. What is full employment? The idea is that employment is as low as possible, without causing inflation, which could be a concern if, say, everyone had a job, and employers raised wages to compete with each other so fast that the rest of the economy couldn't keep up with the rising wages. So the Fed believes that the current rate of unemployment is below the rate of natural unemployment, which is more or less the rate at which a healthy economy allows people to quit their jobs to find better ones, and more efficiently allocate workers into better positions.
So a quick look at a few charts and the economy is looking very good.
Looking at all this it would appear that the economy has more than recovered from the Great Recession, but there are some people who are more skeptical. Although both in and outside of the Fed, economists think the Fed is making the right call, "others think the Fed can afford to be patient and that the official rate of unemployment can fall even further before inflation concerns need to be addressed."
The main reason economists think it's too early to call whether or not we are at full employment? Wages. Namely, they aren't rising fast enough, in fact, they are hardly rising at all. Remember how I said early that the worry with full employment is that rising wages would cause rising inflation? Well, if wages aren't rising then there is no reason to believe that inflation will rise, nor is there any reason to think that employers are trying to compete with each other over job-seekers. Also worth noting, "job gains have failed to slow much, and you would expect them to in an economy at full employment."
It may be that wage growth has slowed because "many firms were unable to reduce wages during the recession, and they must now work off a stockpile of pent-up wage cuts." But if that is the case, is de-incentivizing business from borrowing money by raising interest rates a good idea? Wouldn't a smarter option to be to wait for business to catch their breath from the recession? And what would happen if the Fed overdid it a little bit? Jared Bernstein, a former chief economist to Vice President Joe Biden, and a senior fellow at the Center on Budget and Policy Priorities, said, while referencing a Paul Krugman article, that 'we should act as if there's more slack than he thinks there is, because the "the costs of [Fed] tightening when the economy still has room to grow are much bigger than those of waiting and discovering that we've overshot a bit.'"
In conclusion, in a time where it is both true that our economy is doing well, and there is still room for improvement, the Fed pumping the breaks are only going to draw out, or worse yet stop an already slow recovery.