Up Again, Believe It or Not: The Wall Street Journal Prime Rate Kicked Up By 0.25 Percentage Points

Those learned folks at The Fed were kind enough to give us a break from rate hikes in October, but now it looks like the break is over--actually, it's definitely over!--as today The Wall Street Journal Prime Rate rose by 0.25 percentage points and is now 5.00 percent. This rate increase comes in response to today's hike of The Fed Funds Rate, which is now an even 2.00 percent.

In my opinion, it's going to be nothing but increases moving forward into 2005, so if you've been putting off making a major purchase like a home, a boat or a car, it may be a good idea to secure a loan now before money starts getting expensive again. Fed* press release notes below:

The Federal Open Market Committee decided today to raise its target for the federal funds rate by 25 basis points to 2 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. Output appears to be growing at a moderate pace despite the rise in energy prices, and labor market conditions have improved. Inflation and longer-term inflation expectations remain well contained.

The Committee perceives the upside and downside risks to the attainment of both sustainable growth and price stability for the next few quarters to be roughly equal. With underlying inflation expected to be relatively low, 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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