-->Fed warns 'measured' rate action is not a pledge
Mon Jan 10, 2005 03:18 PM ET

By Alister Bull
WASHINGTON, Jan. 10 (Reuters) - The Federal Reserve has never pledged to hike interest rates only at a measured pace and is closely watching inflation, a top policy-maker said on Monday in a possible sign of faster rate moves than expected.

Atlanta Fed Bank President Jack Guynn, who votes at the next two Fed policy meetings as a stand in for the Dallas Fed, warned markets not to assume the U.S. central bank will continue raising interest rates in quarter-percentage-point increments.

"It is vital that we maintain the flexibility to respond with the best policy action that comes from each FOMC (Federal Open Market Committee) discussion, even if sometimes that has the potential to surprise some in financial markets," he told the Rotary Club of Atlanta.