As expected, short-term interest rates were ratcheted higher this week by the Federal Open Market Committee. In its campaign to keep a tight rein on inflation, *the central bank panel raised the federal funds rate by a quarter-point to 1.5 percent. That's the rate that banks now will charge each other.
*The Fed's strategy seemed on target later in the week when the government announced a rebound in retail sales in July ... *and a slight increase in prices at the wholesale level.
There's inflation of another kind out on the campaign trail these days. A sharp increase in promises has been noted, especially by voters in rural areas being courted by the two candidates for the White House.
President George W. Bush: "I'm not 'gonna be satisfied 'til everybody who wants to work can find a job."
With the obligatory farm state backdrops of hay bales and corn fields the candidates slugged it out again this week.
Senator John Kerry, Democratic Presidential Nominee: "You've heard people in positions of leadership on the other side saying, 'America has turned the corner.' Well it must have been a U-turn. Or else they're continually turning and they're going around in circles and ending up right back where they started from."
The continuing war in Iraq also is a key issue in the campaign. Speaking to farmers in Missouri this week, Kerry said the hike in oil prices is costing U.S. farmers more than $1-billion per year. The democratic nominee said America shouldn't be held hostage by its need for oil.
Kerry proposes the creation of a $20-billion trust fund to foster a reduction in America's dependence on foreign oil. The money would be used to retool U.S. factories in order to build more energy efficient automobiles. Some of the money also would be paid to consumers who purchase vehicles that run on alternative, renewable fuels.
President George W. Bush: "I want your vote..."
The democrats aren't the only ones soliciting votes in farm country. In recent weeks the Bush administration has funneled hundreds of millions of dollars to rural America through a host of initiatives.
Up to $150 million to commercial producers of ethanol and biodiesel who increase their production from eligible commodities. Last year, U.S. ethanol producers expanded production by 607 million gallons.
$10 million in funding for the 2004 Emerging Markets Program, to foster growth in U.S. agricultural exports. Currently, the crops grown on about one of every three U.S. acres is exported.
And loans to foster the expansion of high-speed internet services in rural communities. One loan of more than $1 million was made in Iowa -- a key November battleground state -- where ironically, latest figures say rural access to high-speed internet service is on par with urban communities.