The Federal Reserve left its benchmark interest rate unchanged on Tuesday, ending a streak of consecutive increases that had begun in June 2004. The federal funds rate remains at 5.25 percent.
Policymakers noted that economic growth had slowed, citing a gradual softening in the housing market along with the delayed effects of prior rate increases and higher energy costs. Inflation had run elevated in recent months, the Fed acknowledged.
Even so, the central bank expressed cautious optimism, saying inflation pressures appeared likely to ease over time given contained expectations and the cumulative impact of its monetary tightening. The committee warned, however, that "some inflation risks remain" and kept open the option of further rate increases depending on how the economic and inflation outlook develops.
The decision was not unanimous. Jeffrey Lacker, president of the Richmond Federal Reserve, dissented in favor of a 25-basis-point increase, making him the lone vote among the 10 Federal Open Market Committee members to push for tighter policy.
Historical summary. TurkishPress restated this wire report, first published in August 2006, in its own words.