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-->2:16pm 05/03/05 FOMC raises interest rates to 3% By Robert Schroeder

WASHINGTON (MarketWatch) - The Federal Open Market Committee increased its target for overnight interest rates by a quarter percentage point to 3% percent Tuesday. The increase in the federal funds rate was expected. The vote was unanimous. The committee once again concluded that its monetary policy stance remains accommodative and that rates could be increased"at a pace that is likely to be measured." The statement released by the FOMC left much of its March 22 statement in tact. The committee acknowledged slower growth."Recent data suggest that the solid pace of spending growth has slowed somewhat, partly in response to the earlier increases in energy prices," the committee said.

-->The Federal Open Market Committee decided today to raise its target for the federal funds rate by 25 basis points to 3 percent.

The Committee believes that, even after this action, the stance of monetary policy remains accommodative and, coupled with robust underlying growth in productivity, is providing ongoing support to economic activity. Recent data suggest that the solid pace of spending growth has slowed somewhat, partly in response to the earlier increases in energy prices. Labor market conditions, however, apparently continue to improve gradually. Pressures on inflation have picked up in recent months and pricing power is more evident.


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