Fed Leaves Funds Rate Unchanged

The Federal Open Market Committee has left the target federal funds rate unchanged as expected, marking the first time in recent months that it has not decided to cut rates. The FOMC, the monetary policy-making committee of the Federal Reserve Board, said June 25 that it remains concerned about "tight credit conditions, the ongoing housing contraction, and the rise in energy prices," which "are likely to weigh on economic growth over the next few quarters," but it is also concerned about inflation. "In light of the continued increases in the prices of energy and some other commodities and the elevated state of some indicators of inflation expectations, uncertainty about the inflation outlook remains high," the committee said. The federal funds rate is the interest rate banks charge each other for overnight loans.