WASHINGTON (Dec. 13, 2005) — The Federal Reserve has raised the target for the federal funds rate by 25 basis points to 4.25 percent—the Fed's 13th straight increase.
The Federal Open Market Committee (FOMC) said the expansion in the economy “appears solid” despite high energy prices and hurricane-related disruptions.
“Core inflation has stayed relatively low in recent months and longer-term inflation expectations remain contained,” the Fed said in a statement. “Nevertheless, possible increases in resource utilization as well as elevated energy prices have the potential to add to inflation pressures.”
The FOMC also approved an increase of 25 basis points in the discount rate to 5.25 percent.