US Fed increases interest rates again

The US Federal Reserve has raised interest rates for a sixth straight time.

The US Federal Reserve has raised interest rates for a sixth straight time.

The unanimous decision by the US central bank's policy-setting Federal Open Market Committee moves the target for the benchmark federal funds rate - which affects credit costs throughout the economy - to 2.5 per cent.

In a statement last night after a two-day meeting, Fed officials retained an assessment that economic risks were balanced between slower growth and rising prices and said they thought they could keep raising rates at a "measured" pace.

Signalling the rate-rise cycle will continue, the Fed repeated that monetary policy "remains accommodative," which analysts said almost certainly means another rate rise at the next FOMC meeting on March 22nd.

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The Fed action comes two weeks before Fed Chairman Mr Alan Greenspan's testimony on the economy on February 16-17th to Senate and US House of Representatives panels.