The Federal Open Market Committee, the rate setting-panel for the Federal Reserve, began its first meeting of the year on Tuesday with financial markets expecting a sixth straight quarter-percentage point interest rate increase. Economic data since the Fed last met in December have generally shown the US economic expansion is on a firm footing. Analysts say they see no reason for the central bank to change its policy of gradually raising interest rates, which remain historically low.
The FOMC meeting began at about 1:30 pm EST (1830 GMT), according to a Fed official.
Tuesday's meeting is the first of eight Federal Open Market Committee gatherings in 2005, and is one of two longer sessions it uses every year to prepare reports to Congress on the state of the economy. Fed Chairman Alan Greenspan is due to address lawmakers and answer their questions on February 16 and 17. The rate setting panel meets again on Wednesday and a decision on rates is expected at around 2:15 pm EST (1915 GMT).
The target federal funds rate, or the interbank overnight lending rate that is the benchmark for US lending rates, is currently 2.25 percent.
In June last year, the Fed began to gradually raise interest rates to a level it considers neutral, one which neither hinders growth nor fosters inflation.
The Fed had cut its target fed funds rate to a 1958 low of 1 percent in the wake of the September 11, 2001, attacks and the economic downturn.
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