NEW YORK (CNN/Money) - The Federal Reserve raised a key interest rate another quarter point Wednesday and speculation immediately turned to what the central bank will do at its next meeting in March and for the rest of 2005.

The Fed, as had been expected, raised the fed funds rate -- an overnight bank lending rate that influences rates on many loans -- a quarter percentage point to 2.5 percent. It was the sixth straight increase and came at end of a two-day meeting of the central bank's policy-makers in Washington.

In its statement, the Fed said it plans to maintain a "measured" stance, which analysts said meant the central bank is likely to keep raising rates at quarter-point increments as opposed to taking more drastic action to ward off inflation.

"With underlying inflation expected to be relatively low, the Committee believes that policy accommodation can be removed at a pace that is likely to be measured," the Fed said in its statement.

The Fed added that "robust underlying growth in productivity" was supporting economic growth and that "inflation and longer-term inflation expectations remain well contained." (For more on the statement, click here).

While the language was similar to what the Fed has been saying since it started raising rates last June -- and was no surprise to investors -- some economists and analysts think the Fed needs to slow down.

According to fed funds futures contracts on the Chicago Board of Trade, traders are betting on quarter-point rate hikes in March and May but are not as certain that there will be another increase in late June.

On Wall Street, stocks mostly held their gains, while the price of the 10-year Treasury rose slightly, pushing the benchmark bond's yield down to 4.14 percent.

Many economists think that the Fed will continue to raise rates until they hit a so-called "neutral" level of about 3.5 to 4 percent, which should diminish the threat of inflation without limiting economic growth.

But there is a growing sense that a 4 percent federal funds rate might be too high and that the Fed actually needs to cool off for a bit.

Christopher Burdick, director of economic analysis at Schwab Center for Investment Research, said that the Fed should slow the pace of rate hikes given Friday's report of lower-than-expected growth in gross domestic product (GDP), the broadest measure of the nation's economy.

He said the Fed might even consider removing the "measured" language from the statement it will release following its next meeting in March, adding the central bank's policy-makers could say that decisions about future rate hikes would be dependent on upcoming economic reports.

"Economic growth is moderating and energy prices are still a drag. When you look at the last GDP report, it shows the economy is still below its potential," Burdick said.

To that end, the Fed did note that oil prices have been rising since it last met in December. At that time, the Fed referred to an "earlier rise in energy prices" in its statement. On Wednesday, however, the Fed removed the word "earlier."

Malcolm Polley, chief investment officer of S&T Wealth Management Group, an asset management firm based in Indiana, Pa., agreed that the Fed should slow down. He said that a more optimal target for a neutral fed funds rate would be around 3.25 percent, based on current economic conditions.

As such, he thinks the Fed should raise rates by a quarter-point in March, another quarter-point in May and once more during one of its summer meetings. After that, he thinks the Fed should quit for the year.

"The economy is not moving dramatically and inflation is not a huge problem," said Polley. "It doesn't make sense for the Fed to raise rates throughout the year. That might be a bit of overkill."

So at the very least, it's getting less likely that the Fed would look to raise interest rates by more than a quarter-point in the near future.

Barry Ritholtz, chief market strategist with Maxim Group, said that the Fed is probably unwilling to take more aggressive measures regarding rates for fear of putting the brakes on economic expansion. The only way to justify a faster pace of rate hikes, Ritholtz argues, would be if there is a major pickup in the job market since that could lead to higher levels of inflation.

"We'll see more of the same from the Fed until there's a marked improvement in hiring," said Ritholtz.

The Fed, in its statement, once again conceded that the labor market was just continuing to improve "gradually." So all eyes will be on Friday's employment report for January. Economists are predicting an addition of 200,000 jobs to the nation's payrolls.

To be sure, there are other economic factors that could cause inflation to rear its ugly head, such as the growing budget deficit and the weak dollar. But Robert Brusca, chief economist with Fact and Opinion Economics, a research firm, said that more rate hikes won't have an impact on the budget or the dollar.

"I don't think there's anything the Fed can make better by raising rates faster," said Brusca. "They've gotten rates up a lot in the past year already. Inflation had accelerated because of oil but core inflation is still low and hardly anything to get excited about."