New York: The US Federal Reserve on expected lines raised key interest rates by 25 basis points to between 0.50 per cent and 0.75 per cent on Wednesday, its second such hike since last December.
The Federal Open Market Committee (FOMC), which concluded its two-day meeting, said that the inflation expectations have increased “considerably” and forecast a steeper path for borrowing costs in 2017.
The FOMC expects that with gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace and labor market conditions will strengthen somewhat further.
Inflation is expected to rise to 2 per cent over the medium term as the transitory effects of past declines in energy and import prices dissipate and the labour market strengthens further, it said in a statement. The near-term risks to the economic outlook appear roughly balanced.