Global| Dec 13 2005Fed Funds Rate Raised to 4.25%
by:Tom Moeller
|in:Economy in Brief
Summary
The target interest rate for Federal funds was raised 25 basis points to 4.25% at the latest meeting of the Federal Open Market Committee. The unanimous decision was widely expected by analysts. The discount rate also was raised 25 [...]
The target interest rate for Federal funds was raised 25 basis points to 4.25% at the latest meeting of the Federal Open Market Committee. The unanimous decision was widely expected by analysts. The discount rate also was raised 25 basis points to 5.25%. This latest increase was the thirteenth since June of 2004.
Today's press release from the Fed expressed clear concern about pending inflationary pressure. "... possible increases in resource utilization as well as elevated energy prices have the potential to add to inflation pressures."
As a result of this concern, "further measured policy firming is likely to 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.
Monetary Policy and the Term Structure of Interest Rates from the Federal Reserve Bank of Richmond can be found here.Model Uncertainty and Policy Evaluation: Some Theory and Empirics from the Federal Reserve Bank of San Francisco can be found here.
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
