The Federal Reserve raised US interest rates a quarter per centage point tonight for a seventh straight time and said it can keep lifting rates at a gradual pace to muzzle inflation.
The unanimous and widely anticipated decision by the US central bank's policy-setting Federal Open Market Committee moves the benchmark federal funds rate - which affects credit costs throughout the economy - to 2.75 per cent.
Significantly, the Fed's policy panel said it expected to keep raising short-term borrowing costs at a "measured" pace, wording believed to imply modest quarter-point increases.
Financial markets were particularly focused on what the Fed said about future policy movements, with some economists saying policy-makers may be near a point where they will drop the pledge adopted in May of last year.
The Fed has been raising rates since June last year, aiming to lift the fed funds rate to a neutral level that keeps inflation under control without crimping a steady expansion.