WASHINGTON, D.C. (Sept. 21, 2004) — The Federal Reserve raised its target for the federal funds rate by a one-quarter percentage point to 1.75 percent.
In a statement, the Fed said output growth appears to have regained some traction after moderating earlier this year partly in response to high energy prices. The Fed also said labor market conditions have improved “modestly.”
“Despite the rise in energy prices, inflation and inflation expectations have eased in recent months,” the Fed said.
The Fed also increased the discount rate to 2.75 percent—a 25 basis point increase.