Fed to Raise Rates for 1st Time in 4 Years

[leftchick]

http://story.news.yahoo.com/news?tmpl=story&ncid=716&e=2&u=/ap/20040630/ap_on_bi_ge/fed_interest_rates


WASHINGTON - Now that the economic recovery is on solid ground and the jobs climate is improving, Federal Reserve (news - web sites) policy-makers are ready to boost interest rates for the first time in four years.

Ultra-low rates are no longer needed to support the economy and inflation is coming out of hibernation, reasons enough for the Fed to embark on a credit-tightening campaign that is expected to stretch well into 2005.


Fed Chairman Alan Greenspan (news - web sites) and his colleagues have sent numerous signals to Wall Street and Main Street, especially since their last meeting on May 4, that short-term rates are going up. In anticipation of that, some long-term rates, such as those on mortgages, already have moved higher.


For a year, the Fed's primary tool to influence economic activity — the federal funds rate — has been at 1 percent, a 46-year low. Economists widely expect that Fed policy-makers, at the end of a two-day meeting on Wednesday afternoon, will decide to boost the funds rate by one-quarter percentage point.

[David__77]

1. Ah, they have no choice.

Annualized inflation rates have been 7% and have the potential to go higher. So much for the "new economy."

[Ripley]

2. But wwwwwwhhhhhhhhhyyyyyyyyyyy...I thought the Economy was

simply roaring?

Thankfully we refinanced recently at a fixed rate.

[candy]

3. Good,I'm a saver not a borrower!