Federal Reserve policy makers raised the benchmark US interest rate for a fourth straight time and restated a plan to carry out further increases at a "measured" pace.
The Federal Open Market Committee raised the overnight bank lending rate by a quarter point to 2 percent, saying the labor market improved and the economy is showing "moderate" growth even amid higher oil prices. Another increase may be on tap for December, economists said.
"With underlying inflation expected to be relatively low, the committee believes that policy accommodation can be removed at a pace that is likely to be measured," the Federal Open Market Committee said in a statement after meeting in Washington. The vote to raise the overnight bank lending rate was unanimous.
"This shows they're satisfied at the moment that the economy is growing satisfactorily and that inflation is under very good control," said Lyle E. Gramley, former Fed governor and now an adviser at Washington Research Group. "It also increases the odds" of a December increase.
Monetary policy remains "accommodative," the Fed statement said, an indication that the FOMC will continue raising rates to what economists call a "neutral" level - one that neither slows growth nor sparks inflation.
The Fed has said at every meeting since May it expects to raise rates at a "measured" pace. "The committee will respond to changes in economic prospects as needed to fulfill its obligation to maintain price stability," the statement said.
Meanwhile, Hong Kong's de facto central bank yesterday raised its base rate by a quarter of a percentage point to 3.50 percent, matching the latest rate hike by the US Federal Reserve.
Hong Kong's monetary policy tends to follow that of the United States because the territory pegs its dollar to the US dollar.
Hong Kong banks will decide independently whether to adjust their deposit or lending rates in response to the Hong Kong Monetary Authority's latest rate increase.
A former British colony that returned to Chinese rule in 1997, Hong Kong maintains a separate economic system from the Chinese mainland.
In South Korea, the central bank unexpectedly lowered its key interest rate to a record to boost consumer spending as exports slow. The cut came a day after the bank said it may act to stem "excessive" currency gains.