Fed Raises an Interest Rate

But no change expected soon on benchmark rate
By Nick McMaster,  Newser Staff
Posted Feb 18, 2010 5:19 PM CST
In this Dec. 3, 2009 file photo, Federal Reserve Chairman Ben Bernanke waits to resume testifying on Capitol Hill in Washington, before the Senate Banking Committee.   (AP Photo/Jose Luis Magana, File)
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(Newser) – The Federal Reserve raised the discount rate—the interest rate it charges banks for emergency loans—by a quarter point today. The central bank said the move, widely expected by the financial community, represented only the winding down of the extraordinary measures taken during the financial crisis to stimulate lending, and not a general tightening of credit, the Wall Street Journal reports.

"Like the closure of a number of extraordinary credit programs earlier this month, these changes are intended as a further normalization of the Federal Reserve's lending facilities," the Fed said in a statement. The Federal Funds rate, which more directly affects commercial lending rates, remains at a targeted 0 to 0.25% level.

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