US interest rates may rise unexpectedly.

(BBC) ⸻ The head of the US central bank has warned that officials could raise interest rates farther and faster than previously expected in order to stabilise prices.US stocks fell and the dollar rose following the remarks, which comes just weeks before the bank is due to make another rates announcement.Many analysts had been expecting another 0.25 percentage point increase, but the comments suggest the bank could move more aggressively.Over the last year, the Fed has raised its benchmark rate to more than 4.5% - the highest rate since 2007 - responding to prices rising at the fastest pace in decades.Inflation - the rate at which prices rise - in the US stood at 6.4% in January. Federal Reserve Chairman Jerome Powell has warned that the ultimate level of interest rates is likely to be higher than previously anticipated due to recent data suggesting that progress could be stalling. He said that could push the bank to lift rates above the 5% to 5.5% officials had forecast in December. The comments generated pushback from lawmakers, especially those on the left, who said the moves would do little to address causes of the inflation problem and could lead to an economic slowdown. Mr Powell said the economy would be in worse shape if the bank did not act. US prices jumped an unexpected 0.5% from December to January, while monthly updates on retail sales and hiring have also been stronger than expected. By raising borrowing costs, Federal Reserve officials are hoping to reduce demand for loans for business expansions, homes and other purchases, ultimately cooling the economy and easing the pressures pushing up prices. The moves have already led to sharp slowdowns in rate-sensitive areas of the economy, like the housing market, and Mr Powell said officials would be looking carefully at incoming data as they make their decision. In early afternoon trade in New York, the Dow Jones Industrial Average had fallen 1.6%, while the S&P 500 was down about 1.4% and the Nasdaq was roughly 1% lower.