Fed Leaves Key Rate Unchanged

Barring an increase in inflation, analysts expect the Fed to hold its key rate at 5.25 percent until the middle of next year.
By: David Leonhardt: REALTOR® Magazine Online
The Federal Reserve Board left its key short-term interest rate alone yesterday at 5.25 percent.

No rate hikes are expected soon. Federal Reserve Board Chairman Ben S. Bernanke has vowed to fight inflation, which is up 3.4 percent for the year. Barring an increase in inflation, many analysts expect the Fed to hold its key rate at 5.25 percent until the middle of next year.

The goal is to bring the economy to a 3 percent growth rate with inflation at 1 percent to 2 percent, economists say.

“'I think the Fed is feeling very good about the way the economy is developing,” says Stuart Schweitzer, a strategist at J. P. Morgan Asset and Wealth Management. “The housing slowdown is proceeding, but it’s not spiraling downward, and the rest of the economy is doing O.K.”'