WASHINGTON, Sept. 21 (UPI) -- The U.S. Federal Reserve Tuesday lifted short term interest rates for a third time this year despite skyrocketing oil.
The rate-setting Federal Open Market Committee raised the federal funds rate on overnight loans between banks a quarter percentage point to 1.75 percent.
The move took place at what is the last Fed policy session to be held before the Nov. 2 presidential election.
The price of oil has surged nearly 44 percent this year and some Wall Street experts say the cost of home heating oil for consumers may top $4 a gallon this winter.
"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," the central bank said.
"After moderating earlier this year partly in response to the substantial rise in energy prices, output growth appears to have regained some traction, and labor market conditions have improved modestly. Despite the rise in energy prices, inflation and inflation expectations have eased in recent months," The Fed said.
The FOMC meets eight times a year to determine the near-term direction of monetary policy.
The interest rate set by the Fed, the federal funds rate, serves as a benchmark for all other rates. A change in the fed funds rate, the lending rate banks charge each other for the use of overnight funds, translates directly through to all other interest rates from Treasury bonds to mortgage loans.
The Fed will hold its next policy meeting Nov. 10.
