The US Federal Reserve today raised interest rates for the third time this year by a quarter of a percentage point and said the economy was regaining some momentum, signaling at least one more to come.
The widely expected and unanimous decision by the policy-setting Federal Open Market Committee moves the benchmark federal funds rate - which influences credit costs throughout the economy - to 1.75 per cent.
The central bank lifted short-term rates by matching amounts in June and at its last policy session on August 10th, spelling an end to a lengthy period of super-low rates. Many economists expect a fourth rise at the next meeting on November 10th, about a week after the US presidential elections.
"After moderating earlier this year partly in response to the substantial rise in energy prices, output growth appears to have regained some traction, and labour market conditions have improved modestly," the Fed said in a statement outlining its rate decision, which also increased the largely symbolic discount rate to 2.75 per cent.
The Fed also said inflation pressures and expectations had eased despite a rise in energy costs. It said risks to the US economy remained balanced between weaker growth and higher prices and repeated a pledge to undertake a "measured" course of rate increases.