FED HIKES CONTINUE
By Anthony Longo 29 06 2006
Fed raises short-term rate yet again
The Federal Open Market Committee raised the target federal funds rate by a quarter point, to 5.25 percent.
17th increase
Central bankers have now raised short-term rates 17 times in a row, a quarter-point at a time. The rate-setting panel meets eight times a year and started this rate-hike cycle on June 30, 2004. For a year before that, the federal funds rate had stood at 1 percent and the prime rate at 4 percent.
The Fed raises interest rates to combat inflation. Prices have been rising a bit faster than the central bank prefers. As interest rates rise, consumers and businesses borrow less and buy less. The resulting reduction in demand for goods and services is supposed to keep prices down.
The Fed said - The central bank hinted that at least one more rate increase is likely, but that there probably won’t be many more.
Thinking about REFI’ing or buying…act soon.
Source: BankRate.com
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