NEW YORK - Barely 15 minutes after the Federal Reserve's Open Market Committee raised the Federal Funds rate by 50 basis points to 6.50% on Tuesday, Bank One Corp. and Bank of America Corp. were among the first to say they would hike their prime lending rates to 9.50% from 9.00%.
Other companies that announced their bank's prime rate increase by the end of Tuesday include: First Union Corp. of Charlotte, N.C.; Keycorp of Cleveland; Firstar Corp. of Milwaukee; Wells Fargo & Co. of San Francisco; Michigan National Corp. of Farmington Hills; BankUnited Financial Corp. of Coral Gables, Fla.; Pittsburgh-based Mellon Financial Corp. and PNC Financial Services Group; New York-based Bank of New York, Citibank, Chase Manhattan Corp., HSBC USA Inc., and M&T Bank Corp.; Comerica Inc. in Detroit; FleetBoston Financial Corp. in Boston; Northern Trust Corp. in Chicago; Huntington Bancshares Inc. in Columbus, Ohio, and Minneapolis-based U.S. Bancorp and TCF Financial Corp.
All bank rate changes would be effective Wednesday. The Federal Reserve also said the discount rate on emergency loans to banks increased to 6.00% from 5.50%.
The last time the Fed raised the funds rate by 25 basis points was March 21 of this year; the last time it increased the rate by 50 basis points was Feb. 1, 1995, and by 75 basis points on Nov. 15, 1994.