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| Fed Keeps Rate at 2% |
| 2008-08-06 |
| Aug. 5 (Bloomberg) -- The Federal Reserve kept its benchmark interest rate at 2 percent and signaled that weak employment and financial instability will delay any increase in borrowing costs. ``Labor markets have softened further,'' the Federal Open Market Committee said in a statement today in Washington. ``Tight credit conditions, the ongoing housing contraction, and elevated energy prices are likely to weigh on economic growth.'' Stocks extended gains on speculation that policy makers will leave the rate unchanged in coming months. Officials said they still expect inflation to slow, while acknowledging that the outlook for prices is ``highly uncertain.'' ``This says the Fed is on the hold for the rest of the year,'' said John Silvia, chief economist at Wachovia Corp. in Charlotte, North Carolina, and a former chief economist at the Senate Banking Committee. ``The next move may be up, but it won't occur for a while.'' Dallas Fed President Richard Fisher dissented for a fifth time this year, preferring an increase. ``Although downside risks to growth remain, the upside risks to inflation are also of significant concern to the committee,'' the statement said. |
| Posted by:Steve White |
| #2 ...how come they can't? They are still sucking up the billions in bad loans. |
| Posted by: DarthVader 2008-08-06 11:54 |
| #1 That's great, for banks. Home borrowers are still in it for 6.5 to 7.0% best case scenario. That's not a bad spread, I'm pretty sure I could make money with a setup like that, how come they can't? |
| Posted by: Menhadden Whomons1863 2008-08-06 11:12 |