The Federal Reserve raised US interest rates tonight by a quarter percentage point for a fourth time this year, citing brightening job markets that likely mean more increases lie ahead.
The unanimous 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 two per cent from 1.75 per cent.
The Fed began to lift rates in June from a rock-bottom one per cent and said in its post-meeting statement it expected to be able to keep on a "measured" course of rate increases.
The latest rise follows Friday's Labor Department report that showed the creation of a surprisingly large 337,000 jobs last month.
A further sign of labor market strength came today in the form of an unexpectedly small rise in new claims for unemployment benefits last week, implying fewer layoffs. The long-awaited improvement in job prospects should keep incomes growing and bolster vital consumer spending.
"Output appears to be growing at a moderate pace despite the rise in energy prices, and labor market conditions have improved," the Fed said in outlining its rate decision, which also boosted the largely symbolic discount rate to three per cent.
"The committee believes that, even after this action, the stance of monetary policy remains accommodative and, coupled with robust underlying growth in productivity, is providing ongoing support to economic activity," it added in language that mirrored its prior rate statement and gave no hint of a halt anytime soon.