The Federal Reserve has once again increased the short term interest rate by one quarter of a percent to 2.75 percent. They have raised the rate by the same amount each of the seven times they have met since last June when the rate was one percent and have indicated that they will continue to raise the rate if inflationary pressures continue to build. One source of those pressures is the economy?s rapid growth so far this year and another is the recent jump in energy prices. Some economists suggest that financial markets must come to terms with the possibility that the Fed may accelerate the pace of rate hikes at some point.
See "Fed Again Increases Key Rate By 0.25%", Nell Henderson, The Washington Post, March 22, 2005