Fed set to keep rates on hold

THE US Federal Reserve is expected to hold interest rates steady at 2 per cent tomorrow, acknowledging that financial conditions remain strained but making clear it is still worried about inflation despite a recent pullback in energy prices.

Economists say the US central bank is likely to tweak the language of its monthly statement to reinforce the message that the next rate move will be upward, even though price pressures have eased a bit since its last meeting in late June.