Fed funds target rate at 5.00%

Yesterday the United States Federal Reserve raised its "fed funds target rate" (note 1) to 5.00%. This marked 16 straight quarter point increases in the Fed Funds Rate since June 30, 2004 when they raised it from 1.00% to 1.25%. Between June 25, 2003 and June 30, 2004, the Fed Funds rate was 1.00%

Read the full statement at our FOMC Federal Reserve discussion forum.

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U.S. Treasury Rates ended the day higher with a slightly positive yield curve:

US Treasury Rates for 5/10/06:

Period Rate%

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3 Mo 4.87

6 Mo 5.01

2 yr 5.00

3 yr 5.01

5 yr 5.04

10 yr 5.15

30 yr 5.21

The next meeting of the Federal Reserve to consider changing the fed funds rate is scheduled for June 28th and 29th of 2006. See

Note 1: The federal funds rate is the interest rate at which depository institutions lend balances at the Federal Reserve to other depository institutions overnight.

Note 2: 2006 FOMC Roster:

Members

Ben S. Bernanke, Board of Governors, Chairman

Timothy F. Geithner, New York, Vice Chairman

Susan Schmidt Bies, Board of Governors

Jack Guynn, Atlanta

Donald L. Kohn, Board of Governors

Randall S. Kroszner, Board of Governors

Jeffrey M. Lacker, Richmond

Mark W. Olson, Board of Governors

Sandra Pianalto, Cleveland

Kevin M. Warsh, Board of Governors

Janet L. Yellen, San Francisco

Alternate Members

Thomas M. Hoenig, Kansas City

Cathy E. Minehan, Boston

Michael H. Moskow, Chicago

William Poole, St. Louis

Christine M. Cumming, First Vice President, New York

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