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Friday, February 19, 2010

U.S. Federal Reserve in surprise increase in emergency loan rate

The FTSE 100 was recently up 8 points and Dow Futures were off 50 points on the news that the U.S. Federal Reserve was to begin lifting its benchmark lending rate earlier than previously thought. The Fed announced last night that it would lift the rate it charges banks for emergency loans by a quarter percentage point from 0.5% to 0.75%. It is considered unlikely that the more important Fed Funds rate will rise anytime soon as economic recovery is still weak.

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