Photo taken on Dec. 12, 2005 shows the trading floor Chicago Mercantile Exchange. (Xinhua)

    WASHINGTON, Dec. 13 (Xinhuanet) -- The US Federal Reserve (Fed) said on Tuesday that it decided to raise the short-term interest rate by another one quarter percentage point to 4.25 percent, the highest level since April 2001.

    It is the 13th such increase since the US Fed began to boost the federal funds rate, the interest that commercial banks charge each other on overnight loans, from June 2004.

    In a statement released by the Federal Open market Committee, Fed's policy-making body, after its last policy-making meeting of this year, the Fed said that "despite elevated energy prices and hurricane-related disruptions, the expansion in economic activity appears solid."

Photo taken on Dec. 12, 2005 shows the trading floor Chicago Mercantile Exchange. (Xinhua)

    "Core inflation has stayed relatively low in recent months and longer-term inflation expectations remain contained. Nevertheless, possible increases in resource utilization as well as elevated energy prices have the potential to add to inflation pressures," the statement said.

    "The Committee judges that some further measured policy firming is likely to be needed to keep the risks to the attainment of both sustainable economic growth and price stability roughly in balance," it said. The Fed "will respond to changes in economic prospects as needed to foster these objectives."

    Meanwhile, the US Fed is also signaling that the campaign to raise interest rates to fight inflation was drawing to an end. It came in a slight change in the statement in which the Fed dropped the description of current rate hikes as accommodative. Enditem