Fed: No Rate Change, No Change In Bias

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Millionaire Now! by Larry Nusbaum

This blog is based on the organizational principles found in my new book, "Millionaire Now! - A Financial Toolbox with Seven Steps to Wealth".

Fed: No Rate Change, No Change In Bias

Posted on 08/07/2007 18:04:00 | Link | Post Comment

Another meeting of the Fed's interest-rate policy committee. Another "No change!" Again, housing played a part. The central bankers have kept the benchmark Fed Funds rate at 5.25% since June, after ramping it up from its cyclical low of 1% before June 2004. See this snippet of the Fed's post-meeting comments from today:

"Economic growth was moderate during the first half of the year. 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."

• At June's meeting, the Fed said: "Economic growth appears to have been moderate during the first half of this year, despite the ongoing adjustment in the housing sector. The economy seems likely to continue to expand at a moderate pace over coming quarters."

• At May's meeting, the Fed said: "Economic growth slowed in the first part of this year and the adjustment in the housing sector is ongoing. Nevertheless, the economy seems likely to expand at a moderate pace over coming quarters."

Many housing industry leaders were hoping the Fed would cut the federal funds rate -- the rate banks charge each other to lend money overnight -- to encourage borrowing. The committee will meet three more times this year, with the next meeting scheduled for Sept. 18.

To read today's entire Fed statement, CLICK HERE