The Federal Open Market Committee has raised the fed funds rate by 25 basis points to 3.5%.In raising the short-term rate, the Fed made slight changes to its policy statement that observers said reflect a perception that inflationary signs have waned and growth has increased. "The assessment of the economy was altered from 'the expansion remains firm' to 'aggregate spending appears to have strengthened since last winter.' On the other side of the ledger, acknowledging the extremely benign performance of the core [consumer price index] and core [personal consumption expenditure] lately, the following clause was added to the inflation sentence: 'Core inflation has been relatively low in recent months,'" said RBS Greenwich Capital chief economist Stephen Stanley.

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