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Economy in Brief

Fed Funds Rate Raised to 4.00% and Going Higher?
by Tom Moeller November 1, 2005

The Federal Open Market Committee's unanimous decision to increase the target rate for federal funds 25 basis points to 4.00% was widely expected by analysts. The discount rate also was raised 25 basis points to 5.00%. This latest increase was the twelfth since June of 2004.

Today's press release from the Fed focused on the effects of higher energy prices. "Elevated energy prices and hurricane-related disruptions in economic activity have temporarily depressed output and employment."

The FOMC statement further indicated, as it did in September, that "The cumulative rise in energy and other costs have the potential to add to inflation pressures ..."

For the complete text of the Fed's latest press release please click here.

Implementing Monetary Policy, a March 2005 speech by then Fed Governor Ben S. Bernanke is available here.

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