FOMC Raises Rate To 2%, As Expected

ByJohn S. McClenahen To virtually no one's surprise, especially in the wake of October's strong jobs report, the Federal Open Market Committee (FOMC) raised its target for the influential federal funds rate to 2% on Nov. 10. The target rate had been 1.75% since the panel's previous meeting on Sept. 21. "Output appears to be growing at a moderate pace despite the rise in energy prices, and labor market conditions have improved," the FOMC said in a statement. "Inflation and longer-term inflation expectations remain well contained." But hinting that it's ready to raise the federal funds target faster than the current "measured" pace, the FOMC said it "will respond to changes in economic prospects as needed to fulfill it obligation to maintain price stability." The vote to raise the federal funds target by 25 basis points was unanimous. The FOMC's next scheduled meeting is Dec. 14.