Fed Raises Rates; CU Economist ExpectsAnother Move In December

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NEW YORK - (11/11/04) The Federal Reserve raised the FedFunds rate by a quarter percentage point from 1.75% to 2%,signaling its continued optimism about the economy. And itindicated again it would continue raising rates at “ameasured pace.” NAFCU Economist Jeff Taylor suggested thewidely-expected move also indicates the Fed will raise rates againin December. “A week ago I thought maybe they would take themonth off, but now it looks like they’re laying thegroundwork to raise rates by another 25 basis points inDecember,” he said. “The real question is what theywill do next year.” Taylor said he expects to see bond rates,particularly the 10-year bond rate, to begin to move up and spreadswill begin to normalize.

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