The Federal Reserve has raised US interest rates for the 14th time in a row, suggesting a 19-month campaign was near an end while saying higher borrowing costs may yet be needed.
Meeting on the final day of Chairman Alan Greenspan's 18-1/2 year tenure, the US central bank's Federal Open Market Committee voted unanimously to lift the benchmark federal funds rate target a quarter percentage point to 4.5%, the highest since April 2001.
The statement that outlined the Fed's decision altered its guidance about the future rate course, leaving the door open for Greenspan's successor, Ben Bernanke, to either raise rates again or choose to call a halt.
The Fed said further increases 'may' be needed, a downshift from a December forecast that higher rates were 'likely'. The long-standing pledge of 'measured' rate rises also vanished from the statement.
'Although recent economic data have been uneven, the expansion in economic activity appears solid,' the Fed said in its statement.
Core inflation has stayed relatively low in recent months and longer-term inflation expectations remain contained, the central bank added, while repeating a warning that higher energy prices and tight labor markets have the potential to add to inflation pressures.
The Fed's favorite inflation gauge - a price index for consumer spending that strips out volatile food and energy costs -rose a mild 0.1% in December, but was up 1.9% over the past 12 months, near the top of the central bank's perceived comfort zone.
Alan Greenspan was nominated by President Ronald Reagan in June 1987, and Mr Greenspan, now 79, is considered to have been one of the most influential chairmen in the bank's history.
He is being succeeded by top White House economic adviser Ben Bernanke.
Shortly after Alan Greenspan took up his position in 1987 Wall St was hit with one of the worst stock market crashes since the Great Depression. But his calm handling of that crisis contributed to a quick recovery and also became the hallmark of how economic events would be handled during his 18-year stint at the Fed.
From the Asian crisis to what he termed the 'irrational exuberance' of the dotcom bubble, Greenspan guided the US economy through one of its longest periods of expansion. His statements on the economy were analysed closely by investors.
Mr Greenspan started off life as a jazz saxophonist, before studying economics. His successor Ben Bernanke takes the reins at a time when US government and private sector debt is growing and rising oil prices have pushed up inflation leading to higher interest rates.
