US Fed hikes interest rate 25 basis points to 5.25%

US Fed hikes interest rate 25 basis points to 5.25%

New York (Platts)--29Jun2006

The US Federal Reserve, as expected, raised Thursday its key overnight
lending rate by 25 basis points to 5.25%.

It is the Fed's 17th straight hike.

"Recent indicators suggest that economic growth is moderating from its
quite strong pace earlier this year, partly reflecting a gradual cooling of
the housing market and the lagged effects of increases in interest rates and
energy prices," the Federal Open Market Committee said in a statement
announcing the increase. "Readings on core inflation have been elevated in
recent months. Ongoing productivity gains have held down the rise in unit
labor costs, and inflation expectations remain contained. However, the high
levels of resource utilization and of the prices of energy and other
commodities have the potential to sustain inflation pressures."

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