Fed raises interest rates

Northwestern Financial Review, Oct 15-Oct 31, 2004

The Federal Reserve Board's Open Market Committee raised on Sept. 21 the federal funds rate by 25 basis points to 1.75 percent. The committee said its stance on monetary policy "remains accommodative." Further, it said, "output growth appears to have regained some traction, and labor market conditions have improved modestly." With underlying inflation expected to be relatively low, the committee said its accommodative policy can be removed at a "measured" pace.

The Fed Board also raised the discount rate 25 basis points to 2.75 percent. This is the third time the committee has hiked rates this year. The Open Market Committee's next scheduled meetings are Nov. 10 and Dec. 14.