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Text of statement released by the Federal Reserve

Following is the text of a statement released by the Federal Reserve on 13th Dec 2005, after the Fed's monetary policy panel, the Federal Open Market Committee, decided to raise its benchmark interest rates a quarter-point:

The Federal Open Market Committee decided today to raise its target for the federal funds rate by 25 basis points, to 41/4 percent. Despite elevated energy prices and hurricane-related disruptions, the expansion in economic activity appears solid. Core inflation has stayed relatively low in recent months and longer-term inflation expectations remain contained. Nevertheless, possible increases in resource utilization as well as elevated energy prices have the potential to add to inflation pressures.

The committee judges that some further measured policy firming is likely to be needed to keep the risks to the attainment of both sustainable economic growth and price stability roughly in balance.

In any event, the committee will respond to changes in economic prospects as needed to foster these objectives.

Voting for the F.O.M.C. monetary policy action were: Alan Greenspan, chairman; Timothy F. Geithner, vice chairman; Susan S. Bies; Roger W. Ferguson Jr.; Richard W. Fisher; Donald L. Kohn; Michael H. Moskow; Mark W. Olson; Anthony M. Santomero; and Gary H. Stern.

In a related action, the board of governors unanimously approved a 25-basis-point increase in the discount rate, to 51/4 percent. In taking this action, the board approved the requests submitted by the boards of directors of the Federal Reserve Banks of Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Kansas City, Dallas and San Francisco.

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