Fed Leaves Key Interest Rate UnchangedFed Leaves Key Interest Rate Unchanged
Tuesday August 8, 4:53 pm ET
By Martin Crutsinger, AP Economics Writer
Federal Reserve Leaves Key Interest Rate Unchanged -
at 5.25 Percent, Its First Pause in 2 Years -
WASHINGTON (AP) -- The Federal Reserve left a key interest
rate unchanged Tuesday, ending what had been the longest
unbroken stretch of Fed rate increases in recent history.
The Fed's rate-setting committee voted 9 to 1 to leave
the federal funds rate, the interest banks charge
on overnight loans, at 5.25 percent.
It was the first time the Fed had met and not raised
rates in more than two years.
However, the relief for millions of business and consumer
borrowers could be only temporary. The central bank said
that "some inflation risks remain," holding out
the possibility that it could resume raising rates
at future meetings.
Wall Street, which had posted a strong rally when
Fed Chairman Ben Bernanke had raised the possibility
of a pause last month, rose initially after the
announcement, but then dipped -
into negative territory.
Analysts attributed the slight decline to a decision
by investors to take quick profits after the Fed took
the action that had been expected.
The Dow Jones industrial average finished the day
down 45.79 points to close at 11,173.59.
Private economists speculated on what might happen next;
some predicted the Fed could be finished with the long
string of rate hikes, while others said it may see the
need for possibly one more increase at either
the September or October meeting.
"I think the odds are slightly against another rate hike
at the moment," said David Jones, head of DMJ Advisors,
a Denver-based consulting firm.
"The Fed is putting its primary emphasis on the weakening
economy and less emphasis on inflation."
The Fed decision means that banks' prime lending rate,
the benchmark for various consumer and business loans,
will remain at 8.25 percent.
Before the Fed started raising rates in June 2004,
the prime had been at 4 percent,
its lowest point since 1958.
In 17 consecutive meetings stretching from June 2004
through June 2006, the Fed boosted the funds rate
from a 46-year low of 1 percent to the current 5.25 percent,
all in an effort to slow the economy enough to keep
inflation under control??? -
--
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Money Masters: Federal Reserve History part 1 of 3
https://video.google.com/videoplay?docid=8442305921010099392&q=conspiracy
Money Masters: Federal Reserve History part 2 of 3
https://video.google.com/videoplay?docid=5020331178524208549&q=conspiracy
Money Masters: Federal Reserve History part 3 of 3
https://video.google.com/videoplay?docid=6666372716915416357&q=conspiracy
https://biz.yahoo.com/ap/060808/fed_interest_rates.html?.v=22