Fed likely to keep interest rate unchanged

The US central bank, the Federal Reserve, is expected to keep its benchmark interest rate unchanged at 2% at the meeting of its policy-setting committee this week.

It has more than halved rates since mid-September trying to prevent the housing slide and credit contraction from triggering a deep recession.

The problem for Fed Chairman Ben Bernanke is that he has to address inflation, which hit an annual rate of 4.2% in May without raising the cost of borrowing.

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