US rates up 25bp to 2.75%

The US Federal Reserve Tuesday raised interest rates a quarter-point to 2.75%.

Experts had anticipated the rate hike and that the Federal Reserve would continue its policy of modestly increasing interest rates.

“The Committee believes that, even after this action, the stance of monetary policy remains accommodative and, coupled with robust underlying growth in productivity, is providing ongoing support to economic activity,” a Federal Reserve statement said.

“Though longer- term inflation expectations remain well contained, pressures on inflation have picked up in recent months and pricing power is more evident,” the bank said.

“The Committee perceives that, with appropriate monetary policy action, the upside and downside risks to the attainment of both sustainable growth and price stability should be kept roughly equal,” the statement said.

“With underlying inflation expected to be contained, the Committee believes that policy accommodation can be removed at a pace that is likely to be measured,” the statement said.

The Federal Reserve also said output is increasing “at a solid pace” despite high energy prices.