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Fed will raise rates .. next time. "The Federal Reserve signaled on Tuesday it was preparing to lift interest rates even as it left them at 1958 lows for now, saying price risks were balanced and dropping a pledge to be patient on policy. The rate-setting Federal Open Market Committee formally abandoned its contention that deflation was a risk, preparing markets for the first rate rise in four years without specifying when higher borrowing costs may come. While the key federal funds rate on overnight loans between banks remains at 1 percent, the Fed eliminated a reference to policy patience adopted in 2003, implying it may raise rates sooner rather than later to ward off potential inflation pressures. However, it said rate rises would come at a "measured" pace." Reuters. UPDATE: Will it be a replay of 1994? Posted by Greg Ransom | TrackBack