Feds Boost Interest Rate to 4.25%
The Federal Reserve lifted interest rates to the highest level in 4 1/2 years Tuesday but also indicated its 18-month rate-raising campaign was winding down. At least one more increase in borrowing costs seemed in store to keep inflation under control.
Chairman Alan Greenspan and his Fed colleagues voted unanimously to boost the federal funds rate, the interest banks charge each other on overnight loans, by one-quarter percentage point to 4.25 percent.
It was the 13th consecutive increase of that size since June 2004. That’s when the Fed policy-makers embarked on a credit tightening campaign to lift the funds rate which had been sliced to a 46-year low of 1 percent when the economy was faltering to more normal levels.
Source: ABC News.
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