MOSCOW, September 14 (HS/RIA Novosti) - High oil prices are likely to push the US Federal Reserve to raise interest rates, Richard Bensel, Professor of Government at Cornell University, told RIA Novosti.

With oil prices at or above $100 a barrel and likely to remain high even if they retreat a bit, the Federal Reserve will probably raise interest rates. Recent increases by the EU and Japan make an increase by the Federal Reserve even more probable, Bensel said.

Very high crude oil prices will trickle down the economy and raise inflationary pressures on almost everything that has to be physically transported, the expert warned.

Once the economy adjusts to those pressures by raising retail prices, it will be difficult to bring them down even if the price of crude decreases. The Federal Reserve must include that fact in its monetary policy, he explained.

The European Central Bank raised its three key interest rates by 25 basis points on Thursday citing continued inflationary pressures from the conflict in the Middle East. The US Federal Reserve is set to make its interest-rate decision next week.

---------------

Hindusthan Samachar / Indrani Sarkar