WASHINGTON — The Federal Open Market Committee decided in its meeting today to maintain the federal funds target rate at 5.25% even while acknowledging the impact of the housing breakdown.
“Financial markets have been volatile in recent weeks, credit conditions have become tighter for some households and businesses, and the housing correction is ongoing,” the FOMC statement read. “Nevertheless, the economy seems likely to continue to expand at a moderate pace over coming quarters, supported by solid growth in employment and incomes and a robust global economy.”
Additionally, the committee stated that economic growth was moderate over the first half of the year and, while “readings on core inflation have improved modestly in recent months…a sustained moderation in inflation pressures has yet to be convincingly demonstrated.”
The failure of inflation to moderate as expected is still the key concern at the FOMC, the statement indicated. “Future policy adjustments will depend on the outlook for both inflation and economic growth, as implied by incoming information.”
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