NEW YORK — Major U.S. banks from coast to coast raised their prime lending rates to 9.25% from 8.75% today, about a month after the banking industry lifted the key rate a half percentage point.
The new level is the highest in more than a year and a half, and economists said the move was inevitable in the face of rapidly rising money market rates.
Chase Manhattan and Citibank were the first to announce the increase, followed by Chemical Bank, Manufacturers Hanover Trust, Morgan Guaranty Trust, Mellon Bank, First National Bank of Chicago, Continental Illinois, Security Pacific and Bank of America. Others were expected to follow suit.
The increases reflect the broader pressure pushing up interest rates nationwide. Economists have linked the upward movement to efforts by the Federal Reserve Board to tighten credit conditions, largely to stem the dollar's declining value and keep inflation in check.