WASHINGTON, Aug. 9 (Xinhuanet) -- The US Federal Reserve (Fed) decided Tuesday to raise the federal funds rate, the interest that commercial banks charge each other on overnight loans, by another one quarter percentage point to 3.5 percent.

    This was the 10th consecutive action that the central bank took to tighten credit since June last year, when the key short-term rate stood at a 46-year low of 1 percent.

    The funds rate of 3.5 percent is the highest since Aug. 21, 2001. Some economists predict that the benchmark short-term interest rate could rise to 4.25 percent by the end of this year. Enditem