Fed raises rate .25 points... effect on housing market TBD.
Fed policy makers boosted the federal funds rate by a quarter-percentage point to 5 percent, the highest since March. The rate increase was forecast by all 22 primary dealers of U.S. government securities that trade with the Fed. Seventeen of the dealers surveyed last week by Bloomberg said this will be the last rise by the Fed until at least August so it can assess the impact of higher borrowing costs on the housing market.
The real estate market, which Merrill Lynch & Co. estimates contributed to about half the economy's growth since 2001, is starting to show the effects of higher borrowing costs.
