US Fed hikes interest rate and signals more increases

The US Federal Reserve raised its benchmark lending rate a quarter point and continued to project two more increases this year, signalling more vigilance as inflation approaches its target.

“In view of realised and expected labour market conditions and inflation, the committee decided to raise the target range for the federal funds rate,” the Federal Open Market Committee said yesterday.

Investors had almost fully expected the increase to a range of 0.75% to 1% following unusually clear signals from policy makers including chair Janet Yellen.