Fed raises rates for 3rd time this year with 1 more expected

(AP) – The Federal Reserve is raising a key interest rate for the third time this year in response to a strong U.S. economy and signaling it will likely maintain a pace of gradual rate hikes.

The Fed is lifting its short-term rate – a benchmark for many consumer and business loans – by a quarter-point to a range of 2 percent to 2.25 percent. It marks the eighth hike since late 2015.

The central bank is sticking with its previous forecast for a fourth rate increase before year’s end and for three more in 2019.

The Fed is dropping phrasing it has used for years that characterized its rate policy as “accommodative” by favoring low rates. By doing so, it may be signaling its resolve to keep raising rates.