June 29, 2006

Fed raises rates by a quarter point

WASHINGTON (Reuters) - The Federal Reserve raised interest
rates on Thursday for a 17th straight time, nudging up the
overnight federal funds rate a quarter-percentage point to 5.25
percent, its highest level since March 2001.

The Fed is facing signs economic growth is throttling back
from the first-quarter's breakneck pace, leading some
economists to argue rates have risen far enough.

The U.S. economy expanded at a swift 5.6 percent annual
rate in the first quarter, the government said in its final
estimate on Thursday, but a separate report showed claims for
new jobless benefits edged up last week.