WASHINGTON -- The Federal Reserve announced another interest rate increase on Tuesday.

It was the first Fed meeting under new Chairman Ben Bernanke, who replaced Alan Greenspan earlier this year.

The Fed boosted the federal funds rate, the interest that banks charge each other on overnight loans, by one-quarter percentage point, to 4.75 percent.

It marked the 15th such increase since June 2004.

In response, commercial banks will boost their prime lending rate -- for certain credit cards, home equity lines of credit and other loans -- by a corresponding amount to 7.75 percent.

Those moves will leave borrowing costs at their highest in just about five years.

In a statement accompanying the decision, the Fed said that further tightening may be needed to curb inflation.

The statement indicates another rate hike may be needed at the Fed's next meeting on May 10.

The impact of the rate increases is most obvious in the housing market.

Sales of previously-owned homes have fallen in five of the past six months and sales of new homes dropped in February by the largest amount in nearly nine years.