Fed Makes It Five Straight
Updated from 2:29 p.m. EST
The Federal Reserve raised interest rates for the fifth time this year Tuesday, and gave no indication that its tightening campaign is coming to an end.
In a widely anticipated move, the central bank increased its target fed funds rate by 25 basis points to 2.25%, and repeated its view that policy accommodation can be removed in a "measured" way.
"Output appears to be growing at a moderate pace despite the earlier rise in energy prices, and labor market conditions continue to improve gradually," the bank said in a statement.At its last meeting in November, the Fed said output "appears to be growing at a moderate pace despite the rise in energy prices." It also noted that the job market had "improved." Oil prices have fallen precipitously since hitting a high of more than $55 a barrel in late October, helping to remove one of the drags on consumer spending. Nymex crude oil futures were last sitting at $41.82 a barrel. Still, the recent decline has been offset somewhat by a sluggish labor market. The government reported that just 112,000 new jobs were created last month. "The language of the statement was almost identical to the last one," said John Derrick, who manages $600 million in fixed-income products at U.S. Global Investors. "It was very uneventful." The odds for a sixth rate hike in February barely budged in the wake of the decision and currently stand at 96%. But Asha Bangalore, an economist at Northern Trust, said those odds could be reduced over the next couple of months, if the economy starts to weaken as she expects. "We've seen five monthly declines in the
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