BUSINESS MEMO: INTEREST RATES UP

The Federal Reserve bumped up interest rates last week by a bold half point, pushing a key rate to its highest level in nine years. Fed policy-makers signaled they were prepared to move even more aggressively if needed to fight inflation.

The central bank raised its target for the federal funds rate, the interest that banks charge each other, to 6.5 percent.

It was the sixth time the Fed had increased the funds rate since June but was the first half-point move. Combined with the other five quarter-point increases, the funds rate has now been raised 1.75 percentage points in less than a year.

The Fed's action was matched by announcements from a number of commercial banks that they were increasing their prime lending rate -- the benchmark for millions of consumer and business loans -- by the same half point.