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Bond In Investing Savings The Federal Reserve, the U.S. central bank, Tuesday raised short-term interest rates for the eighth time since June, to three percent.

The central bank's commitment to continue to raise interest rates has helped to keep the Euro steady near its record highs.

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JPY Yesterday, The USD strengthened against the JPY rising to 116.09 from 115.74 after the BOJ, as expected, kept its benchmark interest rate stable at 0.5% and kept its estimations of the national economy unchanged. As it seems for the near future, the BOJ will cooperate with US and European central banks by holding its benchmark interest rate, as it would find it hard to raise rates at the time when U.S. central bank is cutting them.

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year high of 0.75% in August from 0.50%, after elections for parliament's upper house. Meanwhile, the top monetary policy official of Japan's ruling party said on Monday that current economic conditions do not warrant an interest rate hike in August, countering market expectations of a central bank move next month, as it seems at the moment the JPY will continue to suffer and will stay low against most of the other currencies even if the Bank of Japan lifts its key rate. The Japanese central bank is widely expected to leave interest rates on hold at this week's meeting.

Bond In Investing Stock May 3, 2005 (AXcess News) Washington - The Federal Reserve, the U.S. central bank, Tuesday raised short-term interest rates for the eighth time since June, to three percent. The move is intended to combat the inflationary pressure triggered by higher oil prices.The overnight fed funds rate has now risen two percentage points since the Federal Reserve began to remove the monetary stimulus that had pulled the economy out of recession four years ago. The increase had been expected. Market participants recently have been more interested in how much further rates will rise before the independent central bank ends this phase of monetary tightening.

The minimum rate at which banks are prepared to lend money, altered by the central bank's dealing rates with the discount houses. It forms the benchmark for all other interest rates. Basic Rate of Tax The basic rate of income tax is set in the annual budget. Basis Point Unit of measure (usually one hundredth of a percentage point) used to express movements in interest rates, foreign rates or bond yields.

Municipal Bonds Investment Short-term rates are sometimes compared to an accelerator on a car. Rising rates slow economic activity while declining rates speed it up.Robert McTeer, a former Federal Reserve governor now an official at Texas A&M University, believes this period of tightening of monetary policy by the head of the Federal Reserve, Alan Greenspan, is nearly over."Alan Greenspan is very aware that the Fed often takes one step too many. And I think because he is so aware of that it is more likely that the Fed will stop raising rates sooner than people expect," he said.Another Fed watcher, bond trader Bill Gross in San Francisco, agrees that the U.S. economy is particularly sensitive to interest rates. He believes that because the U.S. and world economies are slowing down, the Fed will probably complete its tightening cycle next month."This is a highly levered economy," he said. "This is a highly levered global economy and very sensitive to the short rate. And to the extent that they [the Fed] overdo it, by a quarter, by a half, by a percent-who knows-then, things can happen."

The Fed has left its key interest rate unchanged at 5.25% over recent months, even as the European Central Bank has raised the cost of borrowing seven times since December 2005. Analysts expect the ECB to raise the rate to 4% when it meets Wednesday.

Bond Terms Trading Other Fed watchers say the next interest rate move will be even more closely linked to impending reports measuring the economy's strength or weakness. Growth has recently slowed to a three percent pace while inflation has increased.

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