The Federal Reserve on Thursday raised a key interest rate for the 17th consecutive time and signaled that further rate hikes may still be needed to fight inflation, the Associated PRess reports.

The central bank boosted the federal funds rate, the interest that banks charge each other, by a quarter-point to 5.25 percent, the highest level in more than five years. When the Fed started its credit tightening campaign two years ago, the funds rate stood at a 46-year low of 1 percent.

In the statement explaining the decision, Fed Chairman Ben Bernanke and his colleagues said that "some further policy firming may yet be needed to address inflation risks."

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