Federal Reserve policymakers today raised interest rates by another notch for the fifth consecutive time this year amid signs of a strengthening economy.
Wall Street stocks, which had traded in a narrow range this morning, rose modestly after the US Federal Reserve announcement.
In a widely expected move, the US Federal Reserve’s Federal Open Market Committee, headed by US Federal Reserve chair Alan Greenspan, raised its benchmark rate on federal funds—overnight loans between banks—to 2.25% from 2.0%. It was fifth consecutive quarter-point increase since July.
Under Greenspan’s leadership, the US Federal Reserve has steadily cut its rate from 6.5% in 2000 to 1% by last June to prop up an economy hit by tumbling stock prices, the 2001 terrorist attacks, corporate scandals and the Iraq war.