WASHINGTON (Dec. 14, 2004) — The Federal Reserve has raised the federal funds rate a quarter percentage point to 2.25 percent—its fifth rate hike this year.
The short-term interest rate is an overnight lending rate that helps banks determine the rates of many loans.
In a statement, the Federal Open Market Committee said inflation and longer-term inflation expectations are “well contained.”
“Output appears to be growing at a moderate pace despite the earlier rise in energy prices, and labor market conditions continue to improve gradually,” the committee said.
The Fed also raised the discount rate 25 basis points to 3.25 percent.