Almost one year ago the Fed set the interest rate on overnight loans at 5.25% in response to rising inflation rates. Today, not much has changed.
As of May 9th, the Fed has decided to keep the same interest rate of 5.25%, saying that inflation is still a "predominant policy concern." While many note that lack of job creation and the "meltdowns" of the housing and auto markets signal slow economic growth, the Fed contends that overall the economy is growing at a rate that continues to create inflation pressures.
Because of these mixed signals, and due to a lack of long-term evidence, the Fed has made it clear that it wants to keep its options open and maintain flexibility.
To read the New York Times article in its entirety, go to Fed Gives No Signal of Rate Shift.
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