The interest rate hike announced this week by the Federal Reserve is a major milestone for retirees, who have been caught between a rock and hard place ever since the Great Recession, with zero interest rates and higher-than-average inflation.

The Fed's quarter-point hike in the benchmark federal funds rate is the first in nearly a decade, and it could mark the start of something good for retirees, who rely on bonds, certificates of deposit and money market funds to generate income.

Rates on these instruments have been near zero - and often negative after inflation -- throughout the post-recession era.

Low interest rates have gone hand-in-hand with low inflation. However, inflation is higher for seniors, due mainly to the disproportionate impact of ballooning health-care costs.

From 1985 to 2014, an experimental inflation measure of senior inflation (known as the CPI-E) ran 5.1 percent higher than what is reflected in the broad Consumer Price Index. according to research by J.P. Morgan Asset Management.

Today’s move will not ease the pain. The higher short-term rate already has been priced into the bond market and is not expected to boost interest rates on products like money market funds or certificates of deposit.

And the Fed signaled that it will be cautious about boosting rates further. If rates were, in fact, to rise in the neighborhood of 100 basis points over the next year, and if longer-term bond rates moved in lock step, seniors would get some relief.

“They’ve been earning zero on their cash, so seeing short-term rates move off of zero certainly is good news,” said Scott Thoma, investment strategist at Edward D. Jones & Co.

“No one is saying ‘all clear’ on a secular long-term rise - and rates can stay lower longer than most people think,” adds Tom Anderson, a wealth manager at Morgan Stanley and the author of "The Value of Debt in Retirement."

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