Fed Raises Interest Rates, Banks Follow
In Ben Bernanke’s first meeting as Federal Reserve chairman on Tuesday, he followed the lead of his predecessor Alan Greenspan, and raised lending rates by a quarter-point. The increase was the fifteenth straight by the Federal Reserve, a move seen as another in the Board’s longstanding determination to control inflation. As expected, lending institutions followed the move by raising their prime lending rates to 7.75%, meaning higher rates for customers such as variable-rate credit card holders and adjustable-rate mortgage holders. Bank of America and U.S. Bancorp immediately announced their hikes, and similar announcements from other banks should follow soon.
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