The deputy head of the US Federal Reserve warned yesterday of "pressures" on the US economic horizon but said there were no current imbalances that threatened expansion".

The Fed's vice-chairman, Ms Alice Rivlin, also described the situation in Japan as "worrisome" but did not elaborate.

She was speaking a day after the chairman of the Federal Reserve, Mr Alan Greenspan, sent shockwaves through US financial markets with warnings that the US economy remained particularly vulnerable to wage-driven inflation. - (Reuter)