Entries in Fed Funds (2)


Fed: No Interest Rate Changes in Last Meeting of Year

Chip Somodevilla/Getty Images(WASHINGTON) -- The final Federal Reserve Open Market Committee meeting of the year just ended, and the nation’s central bankers took no action. The key interest rate -- known as the Fed Funds rate -- remains at 0 to 0.25 percent, as does the Fed’s promise to keep rates at this historically low level through mid-2013.

The post-meeting statement suggests that the Fed sees, “…the economy has been expanding moderately, notwithstanding some apparent slowing in global growth.”

Other key points in their assessment of the economy:

  • There are indicators that the jobs situation is getting better, but unemployment remains too high.
  • American consumers are consistently increasing their spending.
  • Businesses are not increasing their spending as quickly.
  • Housing market continues to be a trouble spot.
  • Prices are increasing at a moderate pace, and long-term inflation expectations are in-check.

They did note that there are, “significant downside risks” and most on Wall Street suggest this is a less-than-subtle hint at the risks posed by Europe’s current debt woes.

Markets were expecting the Fed might announce a new program that would lower an interest rate at the Discount Window -- currently around 0.75 percent. The lack of action on that front pushed stocks into negative territory for the day.

Copyright 2011 ABC News Radio


Fed Makes No Rate Change; Hints of Short-Term Inflation/Oil Concerns

Comstock/Thinkstock(WASHINGTON) -- The Federal Reserve announced Wednesday that it will keep a key interest rate – known as the Fed Funds rate -- at a target of zero to 0.25 percent for extended period.”

The post-meeting statement notes that the “...economic recovery is proceeding at a moderate pace and overall conditions in the labor market are improving gradually.”

Most importantly to people who have been feeling the pain at the pump, the governors noted that inflation has picked up in recent months specifically saying that concerns about oil supplies have recently increased the price of that key economic component. They say that even with the recent increases, “...longer-term inflation expectations have remained stable and measures of underlying inflation are still subdued.”

The Fed says it will be paying “close attention” to the inflation issue even though it expects to see price stability in the long-term.

Copyright 2011 ABC News Radio

ABC News Radio