US Fed raises interest rate

By Ovunc Kutlu

NEW YORK

The Federal Reserve announced Wednesday it raised its benchmark interest rate by 25 basis points, the third increase this year, a move that was widely expected by the markets.

The Federal Open Market Committee said members voted unanimously to raise the federal funds rate to 2-2.25 percent, from 1.75-2 percent, a level not seen since 2008.

The central bank said the labor market continued to strengthen and economic activity was rising at a strong pace.

"Job gains have been strong, on average, in recent months, and the unemployment rate has stayed low," the statement said.

The Fed, however, removed the long standing phrase that monetary policy "remains accommodative” from its statement

The move suggests the bank could stop rate hikes in the near future to study their impact the American economy.

U.S. President Donald Trump has criticized the Fed for instituting interest rates hikes, as he prefers a weaker dollar against other currencies to boost American exports to lower the rising trade deficit.

The Fed last increased its benchmark interest rate in June and has made a total of eight rate hikes since December 2015.