The US Federal Reserve nudged interest rates up last night for an eighth month in a row, declaring that it can contain inflationary pressures mounting in America with "measured" increases.
As widely expected, the US central bank's interest-setting Federal Open Market Committee unanimously voted to lift its benchmark federal funds rate by another quarter point to three per cent.
The Fed said spending has slowed in the face of higher energy prices, but that the job market was improving.
It has indicated concern about rising prices as America's economic expansion matures, apparently a worry acute enough to override some recent signs that growth may be flagging and to keep interest rates rising.
"Pressures on inflation have picked up in recent months and pricing power is more evident," the Fed stated. With "appropriate monetary policy action," it added, risks to the US economy would remain balanced between weaker growth and higher prices.
The economy has grown steadily since a brief 2001 downturn, but the pace is moderating under the impact of high oil prices. In the first quarter this year, expansion in gross domestic product eased to an annual 3.1 per cent annual from 3.8 per cent in the final quarter last year.
US prices, not counting food and energy costs, rose at an annual rate of 2.2 per cent in the first quarter the year, faster than at any time since the end of 2001.
So far, while prices are picking up, wage growth is near a standstill.