Fed Keeps Key Interest Rate Unchanged
August 24, 2007
The Federal Reserve kept the target for the federal funds rate unchanged at 5.25 percent. "Economic growth was moderate during the first half of the year," the Fed said in a prepared statement. "Financial markets have been volatile in recent weeks, credit conditions have become tighter for some households and businesses, and the housing correction is ongoing. Nevertheless, the economy seems likely to continue to expand at a moderate pace over coming quarters, supported by solid growth in employment and incomes and a robust global economy."
The Fed said that although the downside risks to growth have increased somewhat, its predominant policy concern remains the risk that inflation will fail to moderate. Future adjustments in the federal funds rate are dependent on the outlook for both inflation and economic growth.
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