WASHINGTON (March 21, 2007) — The Federal Open Market Committee held its benchmark federal funds interest rate steady today at 5.25 percent.
Acknowledging that recent indicators have been mixed, the adjustment in the housing sector is ongoing and recent readings on core inflation have been somewhat elevated, the Fed said, however, that the economy “seems likely to continue to expand at a moderate pace over coming quarters.”
It predicted that inflation pressures seem likely to moderate over time, with the high level of resource utilization having the potential to sustain those pressures.
“In these circumstances, the Committee's predominant policy concern remains the risk that inflation will fail to moderate as expected. Future policy adjustments will depend on the evolution of the outlook for both inflation and economic growth, as implied by incoming information,” the Fed said.
The vote to hold rates at their current level was unanimous.