US Fed Reckons There are Further Rate Hikes in Future

The US Fed Reserve has raised interest rates for the 14th time by 25 points to 4.5 per cent. The Fed has also signaled that there is a prospect for further rate hikes to come. It was the final meeting with Greenspan who is 79 and retiring as chairman after 18 years. The new chairman is the US Senate voted White House economic advisor Ben Bernanke.

"Although recent economic data have been uneven, the expansion in economic activity appears solid," the FOMC said in a statement.

"The committee judges that some further policy firming may be needed to keep the risks to the attainment of both sustainable economic growth and price stability roughly in balance," it said.

"Core inflation has stayed relatively low in recent months and longer-term inflation expectations remain contained," the statement said.

"Nevertheless, possible increases in resource utilization as well as elevated energy prices have the potential to add to inflation pressures."