Fed raises US interest rates

US Federal Reserve policy-makers have raised interest rates for a third time this year, lifting the federal funds rate on overnight loans between banks to 1.75 per cent.

The increase was in line with the market forecast for a 25-basis point rise as the Fed pursues a pace of 'measured' rate increases.

The Hong Kong Association of Banks expects local lenders to follow the US lead.

Association chairman Peter Wong Tung-shun said Hong Kong had not responded to the last two US rate rises, so it could be time to start catching up.