US Federal Reserve hikes interest rate

US Federal Reserve hikes interest rate
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The US Federal Reserve has raised interest rates and forecast three more years of economic growth.

America's central bank sees the economy growing at a faster than expected 3.1 percent this year amid high employment rates and stable inflation near its 2 percent target.

In a statement issued on Wednesday, Fed policymakers lifted the benchmark overnight lending rate by a quarter of a percentage point to a range of 2 percent to 2.25 percent.

The Fed still foresees another rate hike in December, three more next year, and one increase in 2020.

That would put the benchmark overnight lending just above the Fed's estimated "neutral" rate of interest, where rates neither stimulate nor restrict the economy.

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