WASHINGTON (July 1, 2005) — The Federal Reserve for the ninth time in a year raised a key short-term interest rate on June 30.
The Fed raised its target for the federal funds rate by 25 basis points to 3.25 percent. The Fed also raised the discount rate 25 basis points to 4.25 percent.
In a statement, the Fed said that the economic expansion remains firm and labor market conditions are improving gradually despite rising energy costs.
“Pressures on inflation have stayed elevated, but longer-term inflation expectations remain well contained,” the Fed said.