US Fed: Keep interest rates on hold

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The Chairman of the US Federal Reserve is sending out fresh signals that he's in no rush to change tack on the economy and start raising interest rates.

Lending rates are now at a record low of nearly zero percent and, in a speech to a Board Conference at the Fed, Ben Bernanke says they are likely to stay that way for an "extended period." Although Bernanke had earlier sounded a positive note about the US economy, he has also warned that recovery will not be sufficiently robust to prevent further rises in unemployment, now at a 26-year high of 9.8 percent.

Ben Bernanke also made it clear that the Fed is ready and able to fight inflation when needed, since it has the tools and the political will to pull back the huge amounts of money it has pumped into the economy.

Ben Bernanke, Chairman of US Federal Reserve said "My colleagues and I at the Federal Reserve believe that accommodative policies will likely be warranted for an extended period. At some point, however, as economic recovery takes hold, we will need to tighten monetary policy to prevent the emergence of an inflation problem down the road. Overall, the Federal Reserve has a wide range of tools for tightening monetary policy when the economic outlook requires us to do so. We will calibrate the timing and pace of any future tightening together with a mix of tools to best foster our duel objectives of maximum employment and price stability."