Fed Holds Interest Rates Steady
Federal Reserve officials left their interest rate target unchanged at a meeting yesterday and signaled that they may be in no rush to raise rates as long as the economic outlook remains uncertain.</br></br>The central bank's top policymaking group, the Federal Open Market Committee, said the economy "is expanding at a significant pace" but then noted that the rate of growth later this year "is still uncertain."</br></br>The burst of strong economic data in recent weeks caused the FOMC to shift its assessment of the risks facing the economy. At the committee's last meeting, in late January, it had concluded that the risk of further economic weakness outweighed that of added inflation.</br></br>Yesterday, however, the officials said they believe risks to their long-run goals of price stability and sustained economic expansion are now balanced.</br></br>This shift is a first small step in the direction of raising the FOMC's 1.75 percent target for overnight rates later this year -- assuming the rebound from last year's recession does not falter significantly. Many investors and analysts believe the first rate hike will come at the next FOMC meeting on May 7.