FOMC leaves Fed Funds Rate at 5.25%
8 August 2007
The Federal Reserve once again kept interest rates on hold at 5.25% at yesterday’s meeting, a stance held since June 2006.
In the accompanying statement, the Fed continues to highlight that “a sustained moderation in inflationary pressures has yet to be convincingly demonstrated despite readings on core inflation having improved modestly in recent months.” They also retained the long held view that further policy adjustments will depend on the evolution of the outlook for both inflation and economic growth as implied by incoming information.
There was however talk of recent volatility in within the financial markets, especially the credit markets and the ongoing correction in the housing market. Nevertheless, they expect the economy to continue to expand at a moderate pace over coming quarters supported by solid growth in employment and a robust global economy.
Overall, there was little change from June’s statement and the Fed appears to retain a mildly hawkish stance suggesting the interest rates are likely to remain on hold for the remainder of the calendar year.