WASHINGTON, May 10: The Federal Reserve on Wednesday lifted its base rate a quarter percentage point to five per cent while suggesting further rate hikes could be needed.

The increase was the 16th consecutive increase in rates implemented by the Federal Open Market Committee, which made slight changes to its forward-looking statement.

The raise was widely expected by markets, but the future course for the Fed is unclear. Some analysts expect the central bank to pause to assess the impact of its rate hikes, while others argue rates need to go higher to contain inflation.

“The committee judges that some further policy firming may yet be needed to address inflation risks but emphasises that the extent and timing of any such firming will depend importantly on the evolution of the economic outlook as implied by incoming information,” the FOMC statement said.

“In any event, the committee will respond to changes in economic prospects as needed to support the attainment of its objectives.—AFP