Fed Likely to Hold Rates— for Now

Bernanke hopes the 2% interbank rate will help economy rebound
By Jim O'Neill,  Newser Staff
Posted Jun 25, 2008 6:17 AM CDT
Fed Likely to Hold Rates— for Now
High gas prices posted at Shell, left, and Valero, right, gas station in San Bruno, Calif.    (AP Photo/Paul Sakuma)

Despite fears that inflationary forces are revving, the Federal Reserve will probably hold the interbank federal funds rate at 2% today, hoping the bargain basement rate can help kick-start a stalled economy that’s been hamstrung by a tenacious housing slump and a credit crunch hangover, Reuters reports.

"Given the uncertainty about both upside and downside risks, the Fed is likely to stay on hold indefinitely," Deutsche Bank economists told clients.
  (More Ben Bernanke stories.)

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