Credit & Debt: Fed Leaves Interest Rate Unchanged...Again

The Federal Reserve unanimously voted to keep the Federal Funds lending rate (what most lenders index their own rates to) at 5.25 percent:

So far, the Fed's plan seems to be working to slow economic growth and lower inflation pressures. But the steep slide in the once-booming housing sector has raised concerns among some economists that the slowdown could worsen into a more severe downturn.

Actually, if this information is any indication, the Fed's going to have a tougher time containing the damage by far:

Employers added 90,000 positions in February, versus the 113,000 reported last month. Payrolls grew by 177,000 in March, slightly less than the 180,000 previously reported. Workers' wages grew more slowly...Wage growth is important for worker and supports consumer spending, a vital ingredient to the economy's good health. But a rapid pickup — if not blunted by other economic forces — can fan fears about inflation. The slower growth in wages could ease Federal Reserve fears that inflation might not recede as they have predicted.

Anything to keep those horrible "labor costs" down, eh?

You can read the full text of the Fed's statement here.

Posted at May 9, 2007 04:12 PM

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The Federal Reserve unanimously voted to keep the Federal Funds lending rate (what most lenders index their own rates to) at 5.25 percent: So far, the Fed's plan seems to be working to slow economic growth and lower inflation pressures. But the steep slide in the once-booming housing sector has raised concerns among some economists that the slowdown could worsen into a more severe downturn. Actually, if this information is any indication, the Fed's going to have a tougher time containing the damage by far: Employers added 90,000 positions in February, versus the 113,000 reported last month. Payrolls grew by 177,000 in March, slightly less than the 180,000 previously reported. Workers' wages grew more slowly...Wage growth is important for worker and supports consumer spending, a vital ingredient to the economy's good health. But a rapid pickup — if not blunted by other economic forces — can fan fears about inflation. The slower growth in wages could ease Federal Reserve fears that inflation might not recede as they have predicted. Anything to keep those horrible "labor costs" down, eh? You can read the full text of the Fed's statement here.