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Fed Raises Interest Rates, Banks Follow

by Peter Andrew

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.

Published 03/29/06 (Modified 05/07/12)


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