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US Fed puts interest rate rise on hold
The Federal Reserve has finally put a hold on interest rate increases after continuously raising interest rates for two years in a row. The Fed has sent out signals that the US economy is slowing down and interest rate hikes can be halted in its fight against inflation.

The decision came after economic data showed that the US economy is slowing more sharply than predicted. Wall Street and companies have now begun worrying that the Fed may have tightened monetary policy too far. The Fed said economic growth had moderated because of a cooling housing market, high energy prices and the cumulative effects of its long series of rate rises since June 2004.

However, inflation remains stubbornly high mainly due to a jump in oil prices, which has pushed up petrol prices and caused consumers to curb spending. Last month's GDP figures for the second quarter of the year showed the US economy growing at 2.5 per cent which was much weaker than expected and a sharp drop from the pace of GDP growth in the early part of the year, which was 5.6 per cent.
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domain-B : Indian business : News Review : 9 Aug 2006 : international business