Fed Raises Cost of Emergency Loans to Banks (WSJ)

By JON HILSENRATH

The Federal Reserve raised an interest rate it charges banks for emergency loans, and emphasized that a broader tightening of credit for consumers and businesses is still at least several months away. But the late-afternoon increase in the discount rate didn’t have the muted impact Fed officials hoped for.

Stock futures and bond prices fell, and the dollar rose against the euro.

“The Fed can talk all day about how the discount rate hike is technical and not a policy move, but the market sees it as a shot across the bow,” Christopher Rupkey, an economist at Bank of Tokyo-Mitsubishi, said in a note to clients. The Wall Street Journal