In their first meeting under new chief Ben Bernanke, Federal Reserve officials lifted a key US interest rate last night for a 15th straight time and said further moves may be needed to keep inflation at bay.
As widely expected, the US central bank's rate-setting Federal Open Market Committee voted unanimously to raise the benchmark federal funds rate target a quarter percentage point to 4.75%, the highest level since April 2001.
In a statement announcing its action, the Fed repeated that further rate rises may be needed, suggesting it was comfortable with financial market expectations for rates climbing to 5% in the coming months.
'Economic growth has rebounded strongly in the current quarter but appears likely to moderate to a more sustainable pace,' the Fed said in a statement explaining the outcome of a two-day meeting. It added that higher energy and commodity prices so far appeared to be having only a modest impact on core prices and inflation expectations were still contained.
'Still, possible increases in resource utilization, in combination with the elevated prices of energy and other commodities, have the potential to add to inflation pressures,' the Fed said, repeating wording from its January 31 statement.
