Federal Reserve Leaves Key Rate Unchanged

Washington, DC (AHN) - The Federal Reserve ended its rate cutting campaign on Wednesday, after the Federal Open Market Committee decided to leave the federal funds rate unchanged, at 2.00 percent. The Fed had cut the rate seven times since last September.

The decision was approved by a 9 to 1 vote, with the only dissent by Dallas Fed Chairmen, Richard Fisher who wanted to raise the rate.

The Fed Committee acknowledged several keys points, may of which to do with rising inflation due to commodity prices.

In its released statement, the Fed said uncertainty over the inflation outlook is high and upside to inflation risks have increased. However, the Fed does expect inflation to moderate later this year.

The Committee also stated that economic activity continues to expand.

Many economists expected the federal funds rate to be left unchanged as the economy deals with a tight credit market and housing contraction, however, with inflation risks building, the Fed may need to raise the rate in future meetings.