Peter Costello

Australian Treasurer Peter Costello Thursday attempted to put out the fire sparked by his comments on US interest rates which have prompted calls for his sacking at home and sent US markets soaring to all-time highs.

The Australian Financial Review Wednesday reported Costello as saying US Federal Reserve chairman Alan Greenspan was "very optimistic" about inflation and dismissive of speculation about a rise in US interest rates.

Analysts in the United States had been on tenderhooks in recent weeks over whether the Fed was concerned enough about inflationary pressures to take the pre-emptive measure of raising interest rates.

From an AFX report