The Federal Reserve Wednesday halted a
string of dramatic interest rate cuts designed to boost a sagging US economy, keeping its benchmark rate steady at 2 per cent.
The US central bank had lowered its federal funds rate by 3.25 percentage
points since September, but a statement from the Fed's monetary policy board
sounded warnings about increasing risks of inflation.
"Although downside risks to growth remain, they appear to have diminished
somewhat, and the upside risks to inflation and inflation expectations have
increased," the Federal Open Market Committee statement said.
The 9-1 decision by the committee comes the day before a final US growth
figures for the first quarter are released by the government. Previous
estimates showed US gross domestic product expanded 0.6 per cent in the quarter,
dpa reported.