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Economy in Brief

FOMC Increased Fed Funds Rate to 4.75%
by Tom Moeller March 28, 2006

The Federal Open Market Committee increased the target interest rate for Federal funds 25 basis points to 4.75% at today's meeting. It was the fifteenth increase since June of 2004 and the unanimous decision was widely expected by analysts.

The discount rate also was raised 25 basis points to 5.75%.

Reflecting little worry about the economic expansion, the Fed statement indicated "The slowing of the growth of real GDP in the fourth quarter of 2005 seems largely to have reflected temporary or special factors."

Future rate increases were suggested by the FOMC statement. "The Committee judges that some further policy firming may be needed to keep the risks to the attainment of both sustainable economic growth and price stability roughly in balance."

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

Goodbye to M3 from the Federal Reserve Bank of St. Louis can be found here.

What is Tight Money? from the American Enterprise Institute is available here.

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