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

Before you sign the dotted line on that variable rate mortgage, car loan or boat loan, you should know that today The Wall Street Journal Prime Rate rose by 0.25 percentage points and is now 5.50%. This rate increase is in response to today's hike of The Federal Funds Rate, which is now 2.50%.

If you are wondering what The Fed* had to say about their decision to raise the cost of buying money, here's a taste:

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 continue to improve gradually. 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.