Feds Raises Another Quarter

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Central bank boosts fed funds rate to 2.25% but after 5 hikes in this year what's in store for '05?

December 14, 2004: 3:59 PM EST

By Paul R. La Monica, CNN/Money senior writer



NEW YORK (CNN/Money) - The Federal Reserve raised a key short-term interest rate a quarter-percentage point Tuesday -- the fifth increase this year and one that was widely anticipated on Wall Street.



The central bank increased the target for its federal funds rate, an overnight lending rate that helps banks determine rates on many loans, to 2.25 percent from 2 percent.



The Fed's policy-making Open Market Committee said in a statement that inflation is expected to remain relatively low and that it would likely keep raising rates at a "measured" pace -- something it's been saying since it started raising rates in June, and also something that most investors and economists had been expecting.

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economy/fed_rates/index.htm">http://money.cnn.com/2004/12/14/news/economy/fed_rates/index.htm

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