On August 10, the Federal Open Market Committee raised the federal funds rate target to 1.50%, 25 basis points (bp) higher than the target established on June 30. Concurrently, the Board of Governors raised the discount rate 25 bp to 2.5%. These moves are expected to be the first of several: The federal funds futures market indicates that market participants expect the funds rate to exceed 2% by early 2005.
Suggested citation: "Monetary Policy," Federal Reserve Bank of Cleveland, Economic Trends, no. 04-09, pp. 04, 09.01.2004.