fed raises rate to 4.75%

FED RAISES TARGET FOR FEDERAL FUNDS RATE TO 4.75 PERCENT

The Federal Reserve's Open Market Committee yesterday raised the target for the federal funds rate by 25 basis points to 4.75 percent, marking the 15th straight increase since June 2004.

The federal funds target rate is the interest rate charged by banks when they borrow funds "overnight" from each other."As yet, the run-up in the prices of energy and other commodities appears to have had only a modest effect on core inflation, ongoing productivity gains have helped to hold the growth of unit labor costs in check, and inflation expectations remain contained," the Fed said in a prepared statement.

"Still, possible increases in resource utilization, in combination with the elevated prices of energy and other commodities, have the potential to add to inflation pressures."

**taken from the california association of realtors bulletin, dated march 30, 2006.