US Federal Reserve increases interest rate to give it more 'scope to respond to negative shocks'

The US Federal Reserve has raised interest rates from record lows set at the depths of the 2008 financial crisis, a shift that heralds modestly higher rates on some loans.

The Fed coupled its first rate hike in nine years with a signal that further increases are likely to be made slowly as the economy strengthens further and inflation rises from undesirably low levels.