The Federal Reserve looks set to lift US interest rates this evening for a 17th straight time and will likely raise the prospect of increasing them higher in coming months to ward off inflation.
Most analysts expect the Fed to raise the overnight federal funds rate a quarter-percentage point to 5.25 per cent, its highest level since March 2001, although a few have speculated about the potential for a half-point move.
Faced with signs underlying inflation is quickening even as economic growth slows and concerns about their inflation-fighting resolve, officials on the Fed's rate-setting Federal Open Market Committee have made clear their first priority is price stability.
"The committee will be vigilant to ensure that the recent pattern of elevated monthly core inflation readings is not sustained," Fed Chairman Ben Bernanke vowed in June 5th comments that helped cement views that rates were heading higher.