Alan's Last Rate Hike
The Federal Reserve raised a key interest rate to its highest level in five years at the final meeting chaired by Federal Reserve Chairman Alan Greenspan. The bank raised the federal funds rate a quarter point to 4.5 percent, marking the 14th quarter-point increase since June 2004 for the interest rate, which is the rate banks charge each other for overnight loans. Shortly after the rate hike was announced, several banks announced plans to raise their prime lending rate by a quarter point to 7.5 percent. Incoming Fed Chairman Ben Bernanke, who was sworn in on Feb. 1, will oversee the Federal Reserve’s next meeting in March. Greenspan served as the Fed chief for 18 1/2 years.
