The United States Federal Reserve has decided to leave interest rates unchanged but there are growing expectations of a rise before the end of summer. Tuesday's decision means that the Fed funds rate - the rate at which commercial banks charge each other for overnight lending - remains at 5.5 per cent while the discount rate - the rate the Fed charges banks for money - stays at 5 per cent. The Fed last changed rates in March last year when they rose by quarter of a percentage point. Economic problems in Asia are believed to have influenced the seven-member Federal Open Market Committee (FOMC) when it met in Washington on Tuesday. An increase in rates would have attracted funds away from the embattled region creating even more instability. A follow-on rise in Hong Kong's lending rates would have added difficulties to the territory's hard-pressed property and retail sectors. Wall Street finished on Tuesday ahead of its opening level for the first time in four days but was well off intraday highs. It had expected rates to remain stable. As the Fed's decision was announced, speculation started that the tight labour market would trigger a rate rise - possibly a quarter of a percentage point - by the end of the summer. The next FOMC meeting is scheduled for June 30. The US economy is booming with strong consumer spending and housing market growth. Unemployment is at the lowest for 28 years and wage rates are rising 2 per cent quicker than prices. Morgan Stanley Dean Witter global strategist Stephen Roach said: 'Average hourly earnings are now running 4.4 per cent above the year-earlier rate. 'That's not only a cycle high but also the swiftest increase since 1983. 'Core wage inflation - that's private sector workers minus the volatile commission-based sales jobs - rose at 4 per cent in the year ending first quarter, a distinct pickup from the 3.1 per cent pace of a year earlier.' Productivity gains had slipped to 1 per cent which reduced the likelihood of rising efficiency offsetting increasing labour costs, he said. Mr Roach said: 'The Fed can no longer afford to play it cute, counting on yet another in a seemingly endless stream of deflationary supply shocks to bail it out. 'Barring a new upheaval in Asia - or another bolt from the blue - I believe strongly that the Fed is getting ready to act this summer. 'For disbelieving financial markets, the long-awaited test of the great asset bubble of the 1990s is close at hand. 'The cyclical clock is ticking louder and louder.' While Mr Roach's view is gaining greater support there are those who believe that easing inflationary pressure in other sectors of the economy will ease labour pressures.