Fed funds rate rises, as do US consumer and German business confidence

The US consumer remains confident, and so, apparently, is the Federal Reserve. Reuters reports:

[T]he Conference Board, a private research firm, said its measure of consumer sentiment jumped to 107.2 from an upwardly revised 102.7 in February, beating Wall Street forecasts of only a modest gain...

Reflecting the robust economy, the FOMC unanimously agreed to lift its rate target on federal funds, overnight loans between loans, to 4.75 percent from 4.50 percent.

While long-term U.S. inflation remains low, a tightening labor market and stubbornly high energy prices could add to inflation pressures, according to the statement issued by the FOMC after the meeting...

A report on regional business activity from the Richmond Fed showed a sharp rise in March. Its monthly composite manufacturing index rose to 21 in March from zero in February. New orders and shipments rose, as did the number of employees in the Fed's fifth district.

Retail sales, though, did not match the improvement in sentiment.

Sales fell 1.6 percent in the week ended March 25 after prior week's 0.1 percent dip, said the International Council of Shopping Centers and UBS Securities LLC... Sales gained 2.2 percent on a year-over-year basis for the week ended March 25, following a 2.5 percent rise in the prior week, according to Redbook.

While the Federal Reserve has been busy raising rates, the Bank of England has been standing pat on rates. Yesterday, it explained why.

Bank of England policymakers signalled on Tuesday they are in no hurry to move interest rates in either direction as risks to inflation are balanced and the overall outlook remains benign.

On the continent, the risks appear to be mainly to the upside. From FT:

German business confidence surged to a 15-year high in March and eurozone credit growth accelerated strongly last month, boosting the case for an early increase in European Central Bank interest rates...

The jump in the Ifo index – from 103.4 in February to 105.4 – coincided with ECB figures showing eurozone lending to consumers to buy houses rose in February at the fastest annual rate since late 1999. Lending to eurozone companies rose at its fastest pace since early 2001...

Italian business confidence also hit a five-year high, according to separate data on Tuesday.