Wednesday, December 13, 2006

Fed Keeps Key Interest Rate Steady at 5.25

Wrapping up its last meeting of the year, the Federal Reserve yesterday decided to stay its course and keep its key interest rate steady at 5.25 percent, the fourth straight meeting without budging the rate. This gives a break to borrowers who until this summer had endured the pain of two-plus year of rate increases.

Policymakers held back an extra gift that Wall Street was hoping for: a signal that rates might actually be lowered soon. Discussing economic conditions, Fed policymakers said growth has slowed over the course of the year. Nonetheless, they stuck with their previous judgment that the economy will probably expand at a moderate pace in coming quarters. This time they hedged their assessment a bit and noted that recent economic barometers have been mixed.

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