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BUSINESS: Interest Rates On The Rise

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posted on Feb, 2 2005 @ 02:36 PM
Alan Greenspan has once again approved an increase in US interest rates. Up from 2.25% to 2.5%, the balancing act of 2005 has just begun. Economists believe that the Fed will continue to raise the rates until they reach between 3% to 4.5%. The rate hike came as little surprise, but its effect on the market remains to be seen.
The Federal Reserve has raised US interest rates by a quarter of one percent to 2.5%, its sixth rise in succession since last June.
The increase was widely expected and in a statement following its two-day meeting, the Fed said the decision had been unanimous.

It added that it may continue to raise rates at a "measured pace" into 2005.

With the US economy now growing strongly, the Fed wants this growth to continue without seeing prices rise.

Please visit the link provided for the complete story.

Perhaps this was a "non-event" to those running around on the stock floors...but has it struck you yet? Is this a quick fix or a long term attempt at repair?

I think it's obvious that our war-time economy cannot function properly without dramatically adjusting fiscal figures that are meant to be fairly stable...

How much longer are we going to walk the edge of inflation and meet the very minimum satisfaction levels of our monetary targets?

Related News Links:

[edit on 2-2-2005 by Banshee]

posted on Feb, 3 2005 @ 03:00 AM
They are doing it so slowly and gradually you may not notice it.
I didn't realize the Fed Funds rate was up above 2%.

Rising interest rates should help the sagging dollar somewhat. If bonds pay higher interest more people will want them more.

They will help soak up our deficit spending.

I'm thinking the rate won't have a big effect until it gets around 4% or so.

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