The Federal reserve leave rates untouched. In an announcement expected at about 2:15 p.m. ET, officials at the central bank are decided to keep U.S. interest rates steady at four-decade lows and maintain the view that the risks for the economy are balanced between weak growth and inflation.
The Federal Open Market Committee decided today to keep its target for the federal funds rate unchanged at 1-1/4 percent. The Committee believes that this stance is providing important ongoing support to economic activity. The limited number of incoming economic indicators since the November meeting, taken together, are not inconsistent with the economy working its way through its current soft spot.
The federal funds target rate is currently at 1.25 percent, after the Fed jolted the financial markets in early November with an aggressive half-percentage point rate cut designed to kick-start the stalled U.S. economy.
It is predicted that the economy will recover on its own by mid-2006, 2007 in any case, and unless there are huge unexpected new job losses the Fed is not expected to cut rates in the near future.
Pre-Fed meet stagnation was the course of the day for stock market activity indicating investors the world over waited and watched to see just what the Fed would do to steer the economy about. U.S. European and Asian markets struggled as shares were lowered ahead of the Fed meeting. Lowered shares may spell increased trade activity in the days ahead.
The FOMC holds eight regularly scheduled meetings per year to direct the conduct of open market operations by the Federal Reserve Bank of New York in a manner designed to foster the long-run objectives of price stability and sustainable economic growth. The FOMC also establishes policy relating to System operations in the foreign exchange markets.
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