US Fed raises interest rates amid stronger inflation

US Fed raises interest rates amid stronger inflation

The US Federal Reserve raised its benchmark short-term interest rate a quarter percentage point yesterday - to 1.75 percent to 2 percent.

"The Committee expects that further gradual increases in the target range for the federal funds rate will be consistent with sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee's symmetric 2 percent objective over the medium term," the statement said.

Committee members indicated in the update to their quarterly economic forecast that they expected core inflation to reach the Fed's 2% target by the end of the year, and now see economic growth hitting 2.8% for the full year, CNBC reported.

The committee indicated that two more increases are likely this year.

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