The US Federal Reserve has raised interest rates by a quarter percentage point as expected, the third straight rise in a bid to keep a lid on inflation pressures despite some signs of economic softness.
The unanimous decision by the policy-setting Federal Open Market Committee moves the benchmark federal funds rate to 1.75%. The Fed lifted rates by similar amounts in June and at its last policy session on August 10, spelling an end to a lengthy period of historically low rates.
The Federal Open Market Committee said in a statement that it saw the risks to the US economy as balanced, allowing a more neutral monetary policy.
The statement repeated the Fed's stand that future rate increases would come at 'a pace that is likely to be
measured'. But the FOMC said the US economy no longer needed the ultra-low rates needed to avert economic contraction.
Its statement said that after moderating earlier this year, partly due to the substantial rise in energy prices, growth appeared to have regained momentum, and labour market conditions had improved.
The statement added that inflation remained tame despite the recent surge in oil prices.
