In coming months, consumers can expect more of what they have seen for nearly a year — a gradual increase in interest rates controlled by the Federal Reserve (search).

That was the message delivered by the Fed when on Tuesday policy-makers for the eighth time increased a key interest rate by a quarter-point, pushing the federal funds rate up to 3 percent.

That increase was immediately matched by a quarter-point increase in commercial banks' prime lending rate (search), the benchmark rate for millions of consumer and business loans, which moved up to 6 percent, the highest that rate has been since the fall of 2001.

The latest Fed action came despite the fact that the economy has slowed in recent weeks under the weight of rising energy prices.

The Fed took note of the slowdown in the statement explaining its action Tuesday, saying that "recent data suggest that the solid pace of spending growth has slowed somewhat, partly in response to the earlier increases in energy prices."

But the Fed also noted that "pressures on inflation have picked up in recent months and pricing power is more evident."

Analysts say Federal Reserve Chairman Alan Greenspan (search) and his colleagues, caught between a slowing economy and rising inflation, have decided to worry more about inflation.

"While they are getting a little worried about growth, they are still more worried about inflation," said David Wyss, chief economist at Standard & Poor's in New York. "We should expect more of the same in terms of interest rate increases."

Wyss predicted that the Fed could very well keep raising rates by a quarter-point at its five remaining meetings this year — in late June, August, September, November and December. That would leave the funds rate at 4.25 percent by the end of the year.

Wyss said that may be the "neutral" level the Fed has been seeking, meaning a rate that is not so low that it stimulates extra growth or so high that it is holding growth back.

The Fed is seeking to move rates up from the unusually low levels where they were pushed to jump-start the economy in the wake of the 2001 recession and the extended jobless recovery that followed. The funds rate was at a 46-year low of 1 percent last year before the Fed started tightening credit.

Carl Tannenbaum, chief economist at LaSalle Bank, said he looked for quarter-point increases at the next three meetings through September, but he said the central bank could well pause at that time to take stock of how the rate increases are affecting economic activity.

"Nothing in the language would suggest a speed up or a slowing down in the rate-raising campaign," he said of Tuesday's statement.

Financial markets took a tumble for a while after the Fed announcement, believing that the central bank had raised its worry level about inflation, meaning a more aggressive rate-increase campaign in the months ahead.

However, in a rare goof, the Fed announced nearly two hours after the initial statement that it had inadvertently left out a key sentence stating, "Longer-term inflation expectations remain well contained."

The Dow Jones industrial average was down 46 points five minutes before the closing bell. But when that news reached investors, it sparked a rally and the Dow finished the day up 5.25 points at 10,256.95.

In its statement, the Fed retained a phrase it has been using for a year now that it expected to be able to raise rates at a "pace that is likely to be measured," another signal that it planned on sticking with its quarter-point moves.

While the prime rate and other short-term rates controlled by the Fed have been steadily increasing, long-term rates set by market forces have stayed low. Treasury's benchmark 10-year note actually fell to 4.17 percent after the Fed announcement Tuesday, from 4.19 percent the day before.

Long-term rates are being influenced by such factors as the recent weakness in economic growth, with the overall economy growing at just 3.1 percent in the January-March quarter, the slowest pace in two years. But analysts predicted those rates will be rising in the months ahead if the current slowdown proves temporary, as they are forecasting.

Many analysts believe 30-year mortgage rates, which dropped for a fourth-consecutive week to 5.78 percent last week, will begin rising in the months ahead and will likely end the year around 6.5 percent, still low enough to likely keep sales of both new and existing homes near last year's record levels.