WASHINGTON, D.C. — The U.S. Federal Reserve this week raised interest rates another quarter-point.
Also known as the overnight bank lending rate, the federal funds rate is the interest banks charge each other on overnight loans and the Reserve’s main tool for influencing the economy. Low rates can encourage consumer and capital spending, which can help trucking.
The funds rate was at one per cent just six weeks ago when the Reserve raised it to 1.25 per cent — the first increase in four years, reports the American Trucking Associations.
Also this week, banks increased their prime-lending rate by a quarter-point, pushing the rate for consumer and business loans to 4.5 per cent. Industry analysts speculate the Federal Reserve could raise interest rates again when it meets in September.
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