Fed Raises an Interest Rate

The Federal Reserve raised the discount rate—the interest rate it charges banks for emergency loans—by a quarter point today. The central bank said the move, widely expected by the financial community, represented only the winding down of the extraordinary measures taken during the financial crisis to stimulate lending, and not a general tightening of credit, the Wall Street Journal reports.

"Like the closure of a number of extraordinary credit programs earlier this month, these changes are intended as a further normalization of the Federal Reserve's lending facilities," the Fed said in a statement. The Federal Funds rate, which more directly affects commercial lending rates, remains at a targeted 0 to 0.25% level.