Yesterday, The Fed decided to let the good times continue to roll by not making any interest rate changes. The Federal Funds Rate is still set to a very toasty one (1) percent and the Wall Street Journal Prime Rate continues to put a smile on the faces of business folk and regular consumers alike by staying at four (4) percent. Happy borrowing and happy spending to you in the new year! Notes from a press release put out by The Fed*
are as follows:
The Federal Open Market Committee decided today to keep its target for the federal funds rate at 1 percent.
The Committee continues to believe that an accommodative stance of monetary policy, coupled with robust underlying growth in productivity, is providing important ongoing support to economic activity. The evidence accumulated over the intermeeting period confirms that output is expanding briskly. Although new hiring remains subdued, other indicators suggest an improvement in the labor market. Increases in core consumer prices are muted and expected to remain low.
The Committee perceives that the upside and downside risks to the attainment of sustainable growth for the next few quarters are roughly equal. The probability of an unwelcome fall in inflation has diminished in recent months and now appears almost equal to that of a rise in inflation. With inflation quite low and resource use slack, the Committee believes that it can be patient in removing its policy accommodation.