US Federal Reserve lifts rates for the seventh time in the year
Washington: The Federal Reserve raised new worries about inflation on Tuesday, and sparked off alarm in the stock and bond markets that the central bank might drive up interest rates faster than investors have been expecting.

The Fed nudged up short-term interest rates for the seventh time in the last year, raising the federal funds rate on overnight loans between banks to 2.75 percent from 2.5 percent. It restated its intention to keep raising them at a "measured" pace in the months ahead.

But in a departure from previous declarations, the central bank said there were rising inflationary pressures beyond those tied directly to the recent jumps in oil prices.

Continuing a slide in recent weeks, the Dow Jones industrial average and the Nasdaq both dropped by 0.9 percent after the Fed announcement. The Dow, which had been approaching 11,000 not long ago, closed at 10,470.51 yesterday.
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