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Feb 2, 2005 (AXcess News) The Fed raised key interest rate a quarter of a point Wednesday which marked the Central Banks sixth rate hike for fed fund rates, bringing bank lending rates to 2.5 percent.The Fed fund rate increase came as no surprise to the market after the Central Bank' makers, led by Alan Greenspan, Chairman.
Thinkpad The Federal Reserve raised the benchmark fed funds rate a
quarter point Tuesday, marking the 7th consecutive raise in
interest rates, in order to curb
inflation.If you would like to receive late breaking
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Forecasting measured rate increases, the Fed has raised the fed fund rate six consecutive times to 2.5 percent so far with investors expecting it to continue nudging the fed fund rate another quarter point when the Fed's policy panel meets this week.
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The view of the Central Bank Committee appears to be unchanged from its earlier thinking when it began raising the Fed Fund rate, night loans. Though investors expect the Fed to continue raising rates, just when and how much remain a mystery.AdvertisementIf investors are looking for a crystal ball, the Chicago Board of Trade may be the place the start as traders were hedging up rate futures contracts for March and May, point hike in interest rates. June contracts remained quiet, term uncertainties.
Laptop Computers March 22, 2005 (AXcess News) New York - The Federal Reserve
raised the benchmark fed funds rate a quarter point Tuesday,
marking the 7th consecutive raise in interest rates, in order to
curb inflation.The Fed raised the rate charged banks on over-night
loans to 2.75 percent, signaling concern over the rising rate of
inflation when it restated its intent to continue raising
short-term interest rates at what it called a 'measured pace.'
The housing market contraction appeared likely to become even more severe and it seems as if the Feds is in a tight corner. The FOMC cut the benchmark lending rate by 0.75 percentage point to 4.5% in the last two meetings over the past 8 weeks. This is the most aggressive cut since the economy was emerging from its last recession in 2001. Federal funds futures contracts show the Fed is almost certain to lower the rate by another quarter point to 4.25% next month.
Laptop Computer The Federal Reserve released a statement following the rate hike
saying, Though longer-term inflation expectations remain well
contained, pressures on inflation have picked up in recent months
and pricing power is more evident."
The Fed's last rate change occurred last summer, when it hiked the funds rate for a 17th straight time.
Desktop Computer Economists had been predicting that a slowing pace by the the
Fed would widen rate hikes, but after Tuesday's warning by the Fed,
those predictions went to the wayside with the market accepting
that the Federal Reserve intended to continue raising short-term
interest rates this
year.
Notebooks Traders concerned over the trade deficit and rising inflation
are worried that the Fed could raise Fed Fund rates even more than
a quarter of a point if inflation continues to show signs of a
rising economy.Following the Fed's news, the Dow Jones Industrial
Index closed down 94.88 points, or 0.90%, at 10,470.51. The NASDAQ
fell 18.17 points, or 0.91%, closing at 1,989.34. And, the S&P
500 was off 1.02%, closing at 1,171.71.The benchmark 10-year
treasury bond closed up 0.08% at 4.61% yield.
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