Fed Raises Fed Funds Target Rate

Federal Reserve officials have raised the target for the federal funds rate by 25 basis points (to 1.50%) and indicated that they still expect the economy to strengthen despite recent statistics suggesting that employment has been weaker than expected."The [Federal Open Market] Committee believes that, even after this action, the stance of monetary policy remains accommodative and, coupled with robust underlying growth in productivity, is providing ongoing support to economic activity," the FOMC said. "In recent months, output growth has moderated and the pace of improvement in labor market conditions has slowed. This softness likely owes importantly to the substantial rise in energy prices." Nevertheless, the economy seems "poised to resume a stronger pace of expansion," the FOMC said. The Federal Reserve can be found online at http://www.federalreserve.gov.