As Expected, FOMC Holds Rates Steady

The FOMC announced this morning that they were keeping rates steady at 5.25%. Here are some of the highlights from their accompanying statement:

• The Federal Open Market Committee decided today to keep its target for the federal funds rate at 5-1/4 percent.
• Economic growth slowed in the first part of this year and the adjustment in the housing sector is ongoing.
• Nevertheless, the economy seems likely to expand at a moderate pace over coming quarters.
• Core inflation remains somewhat elevated. Although inflation pressures seem likely to moderate over time, the high level of resource utilization has 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.