Federal Reserve Raises Interest Rate on Money Loaned to Banks

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The Federal Reserve announced today that it will be raising the rate it charges banks on emergency loans to 0.75 percent from 0.50 percent, as of Friday. But don't get too excited! They're not saying that we're out of the woods, yet: "Like the closure of a number of extraordinary credit programs earlier this month, these changes are intended as a further normalization of the Federal Reserve's lending facilities. The modifications are not expected to lead to tighter financial conditions for households and businesses and do not signal any change in the outlook for the economy or for monetary policy, which remains about as it was at the January meeting of the Federal Open Market Committee." [Federal Reserve, NYT]