The Federal Reserve left its key interest rate unchanged at 1% this week, and said it could still afford to be "patient" before raising rates. Although many economists do not expect the Fed to increase interest rates until next year, others argue America is now growing at such a clip that the Fed needs to touch the brakes to prevent inflation taking off again. As growth has picked up, so has the talk about inflation. Figures due on January 30th were expected to show that, although GDP growth slowed in the fourth quarter, the economy still expanded at an annual rate of around 4%, and most pundits expect it to grow at about this rate for the rest of the year. Booming commodity prices and a weakening dollar (which could push up import prices) also argue for a pre-emptive rise in interest rates.
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