Washington, DC, February 3--The Federal Reserve raised interest rates for a sixth straight time, extending a policy of gradually lifting borrowing costs to levels high enough to ward off inflation pressures.
The unanimous decision by the central bank's policy-setting Federal Open Market Committee moves the target for the benchmark federal funds rate to 2.5 percent.
In a statement issued 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.
The central bank's wording on the economy all but mirrored the statement it issued at its last policy meeting on Dec. 14.
"Output appears to be growing at a moderate pace, despite the rise in energy prices and labor market conditions continue to improve gradually," the Fed said in the statement outlining its rate decision, which also increased the largely symbolic discount rate a matching amount to 3.5 percent.
The Fed action comes two weeks ahead of Fed Chairman Alan Greenspan's testimony on the economy on Feb. 16-17 before the Senate and the U.S. House of Representatives, respectively. Analysts said that was likely one reason the statement and the meeting outcome was so predictable.
