Federal Reserve Raises Key Interest Rate

The Federal Reserve hiked the Federal Funds rate by a quarter point to five percent, the highest level in more than five years. That increase is reflected in interest rates when you borrow money. The Fed says the move is an effort to head off inflation by cooling economic growth. The stock market is doing very well. Reaction was mixed as stocks dropped briefly and then bounced back Wednesday after the announcement of the rate hike. The Dow Jones could actually surpass its all time high of 11,722 reached back in January 14 of 2000. Wednesday the Dow closed at 11,642.