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Fed hikes key rate for third time this year

By John-Paul Ford Rojas, business reporter
America's central bank has hiked its key interest rate for the third time this year - brushing aside Donald Trump's criticism of its policy.
Jerome Powell, chair of the US Federal Reserve, batted off questions about criticism by Mr Trump that rate increases undermined the economy's expansion - saying the Fed did not take into consideration "political factors".
But there was a note of caution as Mr Powell acknowledged the impact of the burgeoning trade war with China, saying there was a "rising chorus" of concerns from businesses around the country.The Fed's latest announcement on Wednesday saw its short-term rate increase by a quarter of a percentage point to a range of 2%-2.25%, the eighth rise since late 2015.Its decision was widely expected and sees the Fed continue its path of gradually lifting borrowing costs to more normal levels after they were slashed close to zero during the financial crisis.A statement announcing the increase was seen as marking the end of the era of low rates - dropping a reference to "accommodative" from its description of monetary policy.The increases come in response to a strengthening US economy and despite Donald Trump's recent complaint that he was "not thrilled" with the Fed's hikes under Mr Powell - the president's own pick to lead the body.The Fed's rate-setting committee said that latest indicators showed "that the labour market has continued to strengthen and that economic activity has been rising at a strong rate".
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