Chairman Alan Greenspan and the 10 other current voting members of the Federal Open Market Committee (FOMC), a Federal Reserve policymaking panel, on June 30 raised the target for the influential federal funds rate to 3.25%. The target for the federal funds rate, the interest banks charge each other on overnight loans, had been 3% since May 3.
"Although energy prices have risen further, the [economic] expansion remains firm and labor market conditions continue to improve gradually," the panel said in a statement. "With underlying inflation expected to be contained, the committee believes that policy accommodation can be removed at a pace that is likely to be measured."
The FOMC's next scheduled meeting is on Aug. 9, and barring any dramatic economic shift the panel is expected to raise the federal funds target by another 25 basis points to 3.5%.