US raises benchmark rate by 0.25%

US raises benchmark rate by 0.25%
15 Mar

The US Federal Reserve has raised its benchmark interest rate by 0.25% for only the third time in a decade.

The central bank voted to raise its key rate target to a range of 0.75% to 1%.

The Fed had been expected to raise rates after a robust February jobs report, solid pay gains, rising inflation and a dip in the unemployment rate to 4.7%.

Federal Reserve policymakers are expected to increase rates a total of three times this year.

The decision was approved with a 9-1 vote. Neel Kashkari, the head of the Fed's regional bank in Minneapolis, cast the dissenting vote.

The Fed aims to keep the cost of lending between banks within a specified band, which it does by buying or selling financial assets.

It is raising that band by a quarter of a percent.