The Federal Reserve raised short-term interest rates for a third time this year and signalled it will forge ahead with plans to gradually tighten policy even as central bankers face White House pressure for low borrowing costs and concerns over the trade war with China.

The Federal Open Market Committee boosted the target range for its key rate by another quarter point to 2 to 2.25 per cent, in the eighth increase of the current cycle, while teeing up a further increase at its meeting in December.

The Fed dropped previous assurances that policy is “accommodative” as it removes the economic stimulus it put in place during the crisis. Median forecasts released by the Fed’s policymakers pointed to one more rate rise this year, followed by three increases in 2019 and another in 2020 — in line with previous expectations.