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US Federal Reserve holding its nerve.

The US Federal Reserve held its benchmark interest rate unchanged at 5.25 per cent last night, as expected, but signalled that it is still worried that inflation will fail to moderate.

The interest-setting Federal Open Market Committee said that core inflation remained somewhat elevated, but added that inflation pressures were likely to moderate over time. "The committee's predominant policy concern remains the risk that inflation will fail to moderate as expected."

This disappointed investors who had hoped that the central bank would acknowledge the softening in some recent US inflation data opening up the prospect of interest rate cuts later this year.
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Title Annotation:Business
Publication:The Birmingham Post (England)
Date:May 10, 2007
Previous Article:Business bullish despite prospect of latest rate rise; ECONOMY.
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