Nerve and sinew

Washington

THE Federal Reserve is keeping its head when all around are losing theirs. Though the US central bank hinted at some concern about turmoil overseas, it still appears poised to raise rates gradually in the coming months. That is, as long as overseas events do not infect its home turf.

In their January statement, Federal Open Market Committee members were more bullish about the US economy than before. It has been, they noted, expanding at a "solid" pace, whereas its growth had only been "moderate" just six weeks earlier. That is probably due to several factors. Cheap oil has boosted spending and sentiment. Employment keeps improving too, with the jobless rate on target to hit what some economists consider the natural rate of 5 per cent later this year.