U.S. Fed Set to Nudge Interest Rates Up By Tim Ahmann WASHINGTON (Reuters) - U.S. Federal Reserve officials gathered on Tuesday for their final policy meeting of the year and were widely expected to nudge interest rates up to stay ahead of inflation amid a steady economic expansion. The central bank's policy-setting Federal Open Market Committee began meeting at about 9 a.m. (1400 GMT), a Fed official said. The panel is expected to announce its decision on rates at around 2:15 p.m. (1915 GMT). Economists are united in the view that the central bank will push benchmark overnight rates higher by a quarter of a percentage point to 2.25 percent, part of an effort to lift them to more normal levels after slicing them to 45-year lows. "It's not a robust expansion, but on the other hand it is an expansion and we are growing fast enough to see improvements in the job market," said David Berson, chief economist at mortgage finance giant Fannie Mae (FNM.N: Quote , Profile , Research ) . The U.S. economy grew at a respectable 3.7 percent annual rate in the third quarter and job growth has averaged 178,000 over the last three months -- not spectacular but fast enough, analysts say, to whittle away at the unemployment rate, which dipped to 5.4 percent in November. Economists say that as the jobless rate moves lower, the Fed will become more watchful on the inflation front. Shortly after the meeting began, the Fed released a report showing U.S. industrial output rose 0.3 percent last month, a further sign of the economy's steady advance. "This is very consistent with an economy growing at 3.5 to 4.0 percent," said David Littman, chief economist at Comerica Bank in Detroit. "It is congruent with job growth and consumer optimism." Officials will also examine a fresh report from the Commerce Department that showed the U.S. trade deficit widened to a record $55.5 billion in October as lofty oil prices propelled imports into new territory. The data briefly pushed down the dollar, which has been trading near record lows against the euro. Some analysts think higher interest rates may be needed to attract the foreign capital required to fund the huge shortfall in U.S. trade. In addition, a weak dollar would tend to push up import prices and contribute to a swifter pace of U.S. inflation.     Continued ... Quelle "U.S. Fed Set to Nudge Interest Rates Up" : reuters.com Main page for "U.S. Fed Set to Nudge Interest Rates Up"