The Federal Open Market Committee decided today to raise its target for the federal funds rate by 25 basis points to 4 percent, the 12th increase in a year. The Fed committee said that elevated energy prices and hurricane-related disruptions in economic activity have temporarily depressed output and employment. "However, monetary policy accommodation, coupled with robust underlying growth in productivity, is providing ongoing support to economic activity that will likely be augmented by planned rebuilding in the hurricane-affected areas," the Fed said in prepared remarks. "The cumulative rise in energy and other costs have the potential to add to inflation pressures; however, core inflation has been relatively low in recent months and longer-term inflation expectations remain contained....
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