June 30, 2006


Fed raises interest rates a quarter-point (Patrice Hill, 6/30/06, THE WASHINGTON TIMES)

The Federal Reserve raised interest rates another quarter-point yesterday but backed off recent tough rhetoric, saying an impending slowdown from the rousing 5.6 percent growth rate of the first quarter should do much to tame this year's troubling spike in inflation.

The sudden softening by the Fed, whose members had vowed in speeches earlier this month to vanquish "unwelcome" inflation at nearly any cost, soothed investors and sparked powerful rallies in Wall Street stock and bond markets.

The Dow Jones Industrial Average, already boosted yesterday by the robust first-quarter growth reading from the Commerce Department, soared after the Fed's statement and closed up 217 points at 11,191, in its biggest jump since 2003.

Fortunately the American economy is harder to kill than Rasputin.

Posted by Orrin Judd at June 30, 2006 9:49 AM
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