The Fed is still talking about "moderate" interest rate increases

US interest rates have continued to climb as the Federal Reserve raised its benchmark borrowing cost by a quarter of a percentage point to 2.75%.

The increase is the seventh time the Fed has tweaked rates since last June.

Despite saying that inflationary pressures had increased, the Fed said it would keep its "measured" pace of interest rate increases.

Analysts had voiced concerns that price pressures may prompt the Fed to take a more aggressive stance on future hikes.

"The statement was a big surprise," said Alan Ruskin, director of research at 4Cast in New York. "There were a couple of clears signs that the Fed is more worried about inflation and inflation pressure."

Fed watchers have been poring over the text of the central bank's statement, looking for clues as to the state of the economy and future policy.

They point to the stronger language about the inflation risks and say that the Fed is preparing the market for further interest rate increases.

In its statement the Federal Open Market Committee, which sets US interest rates, said that "though longer-term inflation expectations remain well-contained, pressures on inflation have picked up in recent months and pricing power is more evident".

"The rise in energy prices, however, has not notably fed through to core consumer prices," it added.

Analysts have said that the Fed's neutral zone, where it can keep the economy growing without speeding inflation, is somewhere between 3% and 5%.

The US, as with many countries across the globe, has been faced with surging commodity and crude oil prices at a time when its economy has been emerging from slowdown.

Low borrowing costs had been a key aid to that economic recovery and the Fed was forced to slash its interest rate to 1%, its lowest level since the late 1950s.

Since those low levels, the economy has started to create jobs and is showing signs, albeit sporadically, of being robust.

"They left in the 'measured' word," said Brian Reynolds, an strategist at MS Howells & Co. "However, the language was a little tougher. They talked a little more about inflation pressures."

"That is a disappointment to those who thought they might ease the pace of tightening."

(China Daily)

tweak : adjust finely（调整，调节）