Fed Keeps Pushing-Up Short-TermRates

WASHINGTON - (12/15/04) -- The Federal Reserve continued itsbid to slow economic growth and inflation and added another 25basis points Tuesday to its target rate for overnight FederalFunds, pushing the benchmark rate to 2.25%. Economists widelypredicted Tuesday's rate hike--the fifth in the past sixmonths--and anticipate the Fed will continue boosting short-termrates in the coming months. "I fully expect another 25 in February,and for them to pretty much keep hiking rates at every meetinguntil it (the target rate) gets to 4 or four-and-a-half percent"Jeff Taylor, a NAFCU economist, told The Credit Union Journal. "Thequestion is, when will the long rates start heading up?' he asked.He was referring to the fact that the boost in short-term rates hashad no effect on mortgage rates, with long-term mortgage rateslower today than they were six months ago.