The U.S. Federal Reserve left its key interest rate unchanged at 5.25 percent on 8 August 2006, with the Federal Open Market Committee citing a slowdown in economic growth driven partly by a cooling housing market and the delayed effects of prior rate increases and higher energy costs.
Policymakers noted that core inflation had run at elevated levels in recent months, and that high resource utilization along with elevated commodity and energy prices could keep upward pressure on prices. The committee nonetheless expressed a belief that inflation would likely ease over time, given anchored inflation expectations and the cumulative impact of previous monetary tightening.
The Fed stressed that some inflation risks persist and that any further rate increases would depend on how both inflation and growth data evolve in coming months.
Eight members voted in favor of holding rates steady. Jeffrey M. Lacker dissented, preferring a 25-basis-point increase at the meeting. The vote was led by Chairman Ben S. Bernanke, with Vice Chairman Timothy F. Geithner among those supporting the pause.
Historical summary. TurkishPress restated this wire report, first published in August 2006, in its own words.