Again from MarketWatch:
"THE FED
FOMC raises rates, signals more to come
Growth should moderate, but inflation still poses a worry
By Greg Robb, MarketWatch
Last Update: 2:22 PM ET Mar 28, 2006
WASHINGTON (MarketWatch) - The Federal Reserve opened the Ben Bernanke era on Tuesday the way it closed Alan Greenspan's: With a quarter-point rate hike.
The Federal Open Market Committee raised its overnight lending rate by a quarter percentage point to 4.75% as expected and left the door open for further rate hikes.
With the unanimous vote, the FOMC has now raised interest rates at 15 straight meetings.
"Some further policy firming may be needed to keep the risks to the attainment of both sustainable economic growth and price stability roughly in balance," the Fed said, repeating language from the January statement.
The FOMC statement acknowledged that temporary factors were boosting the economy in the first quarter. The committee said it expected growth to "moderate to a more sustainable pace."
Higher prices for energy and other commodities have had only a "modest effect on core inflation," the committee said, warning that high rates of resource utilization, along with elevated energy and commodity prices, could have the potential to add to inflationary pressures.
At 4.75%, the federal funds rate is now the highest it's been in five years."
This story and the story about consumer confidence just don't fit in the same universe. If you owe money on, for example, an adjustable rate mortgage or credit cards, your payments are going to go up as a result of today's announcement. "Inflationary pressures" means, for example, that the Fancy Feast cat food I used to be able to buy for fifty cents a can now costs 59 cents a can. I may be crazy, but I can't see how this environment is good for consumers.
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