Federal Reserve Chairman Alan Greenspan announced a quarter point increase in interest rates today, the fourth time the Fed has raised rates in 2004. The rate now stands at 2.0 percent, up from 1.75%. At the beginning of 2004, the reserve rate stood at 1 percent, the lowest rate in more than forty years. The fund rate is the rate that banks charge each other on overnight loans.

Commerical banks were expected to follow suit and raise their prime rate for consumers by a quarter point as well. That now stands at 4.75 percent.

The Fed indicated that the rate increases would continue but would do so gradually as long as inflation is not a major threat to the enconomy. Many economic experts feel that inflation would result if the rates stayed as low as they had been.

The Dow Jones Industrial Average was up today as the rate increased was anticipated by most businesses.