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US Fed keeps interest rates unchanged at 5.25%

August 09, 2006 10:20 IST

The US Federal Reserve has paused and kept interest rates unchanged at 5.25%. This also ended a two-year run of consecutive increases while leaving room for further moves, should inflation accelerate.

The Federal Open Market Committee's statement after meeting in Washington said inflation has been "elevated" and remains a risk, using words identical to the last decision on June 29.

The panel then added a new sentence predicting price pressures will abate because of past Fed moves and "other factors restraining aggregate demand."

The decision also provoked Fed's first public disagreement since Chairman Ben S Bernanke took the Central Bank's helm in February.

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