The Federal Reserve announced Wednesday that it will leave interest rates where they are, at least for the time being. "Recent indicators have suggested somewhat firmer economic growth,
and some tentative signs of stabiliztion have appeared in the housing market," the Fed's Open Market Committee said. "Overall, the economy seems likely to expand at a moderate pace over coming quarters." It added that core inflation readings have improved modestly in recent months but "some inflation risks remain."
The committee decided to stick with 5.25 percent for the federal funds rate, an overnight bank lending rate that affects rates on other types of loans. Because energy prices have decreased, many economists think the Fed will leave the rate where it is for several months or possibly throughout 2007. Many have also called for lower interest rates, blaming tighter credit for the recent slowdown in economic growth.