As speculated, on Tuesday, May 16, 2000, the Federal Reserve Board decided to raise US interest rates another 0.5 percent, to 6.5 percent. This interest rate hike follows five previous increases of a quarter-point each since June 1999. This is the first time in sixteen years that US interest rates have risen above 5 percent. The new rate will affect the borrowing costs for many Americans, including those with unpaid credit card balances and home equity loans, and also for small business that have taken out bank loans. Fed Chairman Alan Greenspan has long worried that the low unemployment rate coupled with booming economic growth will cause inflation to rise, which is why he has continued to advocate for these interest rate increases. Following Tuesday's announcement by the Fed, Wall Street remained stable; the Dow Jones ended the day up 127 points at 10,935. While President Clinton stands behind the Fed's decision to raise the rates, others, including NAM President Jerry Jasinowski, John Sweeney the president of AFL-CIO, and Democratic Senator Tom Harken of Iowa, have all spoken against the latest interest rate hike.
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