Raising the Fed Rate

By another .25% click:

The Federal Open Market Committee decided today to raise its target for the federal funds rate by 25 basis points to 2-3/4 percent.

The 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. Output evidently continues to grow at a solid pace despite the rise in energy prices, and labor market conditions continue to improve gradually. Though longer-term inflation expectations remain well contained, pressures on inflation have picked up in recent months and pricing power is more evident. The rise in energy prices, however, has not notably fed through to core consumer prices.

The Committee perceives that, with appropriate monetary policy action, the upside and downside risks to the attainment of both sustainable growth and price stability should be kept roughly equal. With underlying inflation expected to be contained, the Committee believes that policy accommodation can be removed at a pace that is likely to be measured. Nonetheless, the Committee will respond to changes in economic prospects as needed to fulfill its obligation to maintain price stability.

Not really cowbell-worthy -- hell, who gets jazzed over increased interest rates? -- but it does indicate continuing confidence in the economy's fundamentals. The economy is strong enough, apparently, to ride on steadily and briskly, without the benefit of artificially-low-interest-rate training-wheels.

Thanks to someone who seems to be a new Deep Stoat, whom I will therefore call Deep Stoat Part II, in honor of the (universally reveilled, google tells me) sequel to Deep Throat.

posted by Ace at 02:45 PM

| Access Comments