In a move whose timing surprised some observers, Chemical Banking Corp. raised its prime lending rate on Friday to 6.5%, from 6.25%.

"You might have thought they would have held off a bit longer," given all the talk Friday about a possible easing by the Federal Reserve, said Judah Kraushaar of Merrill Lynch & Co.

"We're just moving back in line with the rest of the market," a Chemical spokesman said.

Chemical lowered its prime to 6.2% from 6.5% on April 13, saying it wanted to pass along lower funding costs to customers and demonstrate its eagerness to lend.

Other banks declined to follow Chemical's lead, and borrowers were unmoved by the quarter-point reduction.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.