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No rates movement expected by Feds |
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Thursday, 21 December 2006 |
No rates movement expected by Feds
WASHINGTON -- The U.S. economy is in pretty good health despite the ailing housing and auto industries, allowing the Federal Reserve to feel comfortable about leaving interest rates alone.
Fed chairman Ben Bernanke and his central- bank colleagues are expected to keep their finger on the interest-rate pause button when they meet today, their last such session for the year.
It would mark the fourth meeting in a row in which the Fed left an important rate unchanged at 5.25 per cent.
As a result, commercial banks' prime-interest rate -- for certain credit cards, home equity lines of credit and other loans -- would stay at 8.25 per cent, once again giving borrowers some breathing room.
The Fed believes slower economic growth will eventually lessen inflation pressures. It also is fairly confident that the slumping housing and auto sectors won't sink the economy.
To be sure, policy-makers will keep close watch for any danger signs -- namely a pickup in inflation or a sharper-than-expected housing swoon that could damage the entire economy and throw it into recession. For now, though, they feel it is appropriate to leave rates where they are.
(prepared by Associated Press/Vancouver Province)
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