Rate Increase: Wall Street Journal Prime Rate Goes Up By 0.25 Percentage Points

Today, The Wall Street Journal Prime Rate went up by 25 basis points and is now 6.25%. The corresponding Fed Funds Rate is now 3.25%. Here's part of the press release put out today by The Federal Open Market Committee* :

The Federal Open Market Committee decided today to raise its target for the federal funds rate by 25 basis points to 3-1/4 percent.

The Committee believes that, even after this action, the stance of monetary policy remains accommodative and, coupled with robust underlying growth in productivity, is providing ongoing support to economic activity. Although energy prices have risen further, the expansion remains firm and labor market conditions continue to improve gradually. Pressures on inflation have stayed elevated, but longer-term inflation expectations remain well contained.

The Committee perceives that, with appropriate monetary policy action, the upside and downside risks to the attainment of both sustainable growth and price stability should be kept roughly equal. 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. Nonetheless, the Committee will respond to changes in economic prospects as needed to fulfill its obligation to maintain price stability.

Click here for a comprehensive history of The Wall Street Journal Prime Rate.

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2006 FOMC Tentative Meeting Schedule Released Today

Today, The Federal Reserve's Open Market Committee (FOMC) released their tentative meeting schedule for 2006. The FOMC doesn't always stick to the exact dates on the schedule (hence tentative), but they do always meet at least 8 times per calendar year.

Why is this schedule important to you? Because it is at these FOMC meetings that The FOMC votes on whether to raise, lower or make no changes to The Fed Funds Target Rate, and when the Fed Funds Target Rate changes, The Wall Street Journal® Prime Rate (also known as the U.S. or national prime rate) will also change.

Here's the tentative schedule for 2006:

January 31 - February 1, 2006

March 28, 2006

May 10, 2006

June 28-29, 2006

August 8, 2006

September 20, 2006

October 24, 2006

December 12, 2006

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