Federal Reserve boosts key interest rate to 2.5%

The Federal Open Market Committee decided on Wednesday 2 February to raise its target for the federal funds rate by 25 basis points to 2-1/2 per cent. In a press release the FOMC said the economy is growing "at a moderate pace despite the rise in energy prices, and labor market conditions continue to improve gradually."

The Committee believes that, even after this action, the stance of monetary policy remains accommodative and, coupled with robust underlying growth in productivity, is providin