Fed Expected to Hike Key Rate Yet Again

The Federal Reserve is expected to hike its benchmark short-term interest rate by a quarter of a percentage point to 4% and give no signal that its credit-tightening campaign is near an end when it holds its policy-setting meeting Tuesday.

The Federal Open Market Committee meeting will be the third-from-final gathering chaired by Alan Greenspan, who retires Jan. 31.

Last week President Bush named Ben S. Bernanke the next Fed chairman, subject to Senate confirmation.

Economists believe that the U.S. central bank will remain on the inflation offensive.

“We expect the 12th consecutive increase in the target Fed funds rate and really no change in the tactics deployed in recent meetings,” said Lynn Reaser, chief economist at Bank of America Capital Management in Boston.