Inflation Up 2%, Growth downt to 0.7 - Fed Holds at 5.25%
The Federal Reserve decided to hold the federal funds reserve rate of 5.25%. Economic conditions are present in a mixed bag for the Federal Reserve is a continued to reassess what their next move will be as they attempt to head off inflation and spur growth. Inflation based on the Federal Reserve’s preferred benchmark rate rose 2 points yet growth across United States is down to a rate of 0.7%. Unemployment continues to hold it for half percent, and fallout from issues in the mortgage market do not seem to be making a significant impact on the economy other than the decrease in the growth rate, which to be clear is a reduction in the speed of growth.
In general it’s good news of the Fed is not increasing the interest rate as inflation continues to increase. However if energy prices continue to rise in inflation continues to grow the Federal Reserve will likely have to act and raise interest again. If energy prices can be brought back into line and other inflationary measures taper off in the economy could escape the federal fund rate hike.
Link to Fed Leaves Interest Rates at 5.25 Percent - washingtonpost.com
