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Fed raises target rate by quarter of a percent

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The Federal Reserve's Open Market Committee today reversed its course of slashing its target for the federal funds rate and instead raised the target by a 25 basis points to 1.25 percent. The widely anticipated move drew little outward worry from the real estate community, despite talk of a housing bubble. Although the Fed's target rate does not directly impact mortgage rates, it has an indirect effect and the ultra-accommodative 1 percent had fueled the red-hot housing market. But many within the industry see no reason to worry–at least not yet–about a slowing housing market. "If it slows down to levels of last year, or the year before that or the year before that, we'll take it. Those were all great years," said Chappy Adams, president of Illustrated Properties in Palm Beach County, Fla. In its policy statement, the Fed said it believes "even after this action, the stance of monetary policy remains accommodative and, coupled with robust underlying growth in productivity,...