Posted at 8:53 a.m., Thursday, June 28, 2007
Fed leaves short-term rates unchanged at 5.25 percent
Advertiser StaffWASHINGTON The Federal Reserve left a key interest rate unchanged today, expressing new optimism on economic growth and lower inflation.
Fed Chairman Ben Bernanke and his colleagues voted unanimously to keep the federal funds rate, the interest that banks charge each other, at 5.25 percent, where it has been for the past year.
Analysts believe that Fed officials could remain on hold through the rest of this year and well into 2008. Investor hopes that the weakening housing market could trigger rate cuts in coming months have faded as the economy has showed signs of a rebound.
The Fed decision means that banks' prime lending rate, the benchmark for millions of consumer and business loans, will remain unchanged at 8.25 percent, where it has been for the past year.
In a brief statement explaining its actions, the Fed continued to say that its greatest concern was that the risk of inflation will not moderate as expected.