If the Federal Open Market Committee (FOMC), the U.S. Federal Reserve panel that sets short-term interest rate targets, plans to stop raising the federal funds target rate any time soon, Chairman Alan Greenspan gave no hint of it in Congressional testimony on June 9.
Economists at Merrill Lynch & Co. had suggested the FOMC might go on hold after raising the target rate later this month or in August. But Greenspan told the Joint Economic Committee that the U.S. economy "seems to be on a reasonably firm footing, and underlying inflation remains contained." The funds rate will be raised "at a pace that is likely to be measured," he repeated.
The federal funds target rate in now at 3%. The FOMC is expected to raise it by 25 basis points to 3.25% at its two-day meeting June 29-30.
