WASHINGTON, D.C. (May 3, 2005) — The Federal Open Market Committee (FOMC) raised as expected its target for the federal funds rate to 3 percent.
The raise increases the rate by 25 basis points. It was the eighth straight increase in the target for overnight interest rates by the Fed.
In a statement, the FOMC said recent data suggest the solid pace of spending growth has slowed some partly in response to increases in energy prices. But labor market conditions continue to improve gradually, the FOMC said.
The group also approved a 25-basis point increase in the discount rate to 4 percent.