Prime Rate Increase: Wall Street Journal Prime Rate Goes Up By 25 Basis Points

Gas prices! Gas prices! Is there any relief on the horizon? Even Wal-Mart is complaining about the high cost of energy cutting into their profits. Nobody feels sorry for Wal-Mart, but what about the rest of us? Any now interest rates go up again. Doesn't anybody care about the middle class anymore? Hey, Mr. Greenspan: give us a break!

Today, The Wall Street Journal Prime Rate went up by 0.25 percentage points and is now 6.50%. The corresponding Fed Funds Rate is now 3.50%. Here's what The Federal Open Market Committee* had to say about today's rate increase:

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. Aggregate spending, despite high energy prices, appears to have strengthened since late winter, and labor market conditions continue to improve gradually. Core inflation has been relatively low in recent months and longer-term inflation expectations remain well contained, but pressures on inflation have stayed elevated.

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.