Fed may enter a period of unchanged rates

Discussion in 'Wall St. News' started by patanx, Oct 26, 2006.

  1. patanx


    The Federal Reserve, after an unbroken two-year stretch of raising interest rates, may now be entering a prolonged period where the central bank keeps rates unchanged.
    It could be next June or later before the Fed makes any change in interest rates because of the opposing forces buffeting the economy at present.

    Analysts hold that view because they think inflation is likely to linger at levels that will keep the Fed from cutting rates and economic growth will be too slow to think about raising rates.

    The central bank, in announcing Wednesday that it was keeping the federal funds rate unchanged for a third straight meeting at 5.25%, cited the twin dangers it is confronting.

    The Fed statement said core inflation, which excludes energy and food, remained at "elevated" levels even as overall economic growth has been slowing, reflecting in part the slowdown in housing.
  2. ya think?