With the latest financial sector turmoil and easing inflation, many economists were at least thinking the Federal Reserve would reduce interest rates on Tuesday. That was not the case. The Fed left the benchmark federal funds rate stead at 2 %, where it’s been since April and for the third straight meeting.
The vote was unanimous, without even a dissent from Dallas Fed President Richard Fisher, who voted to increase rates during two prior Fed meetings.
A MarketWatch article by Greg Robb aptly opened with the the likely intent on the move:
"[The fed is] trying to project an appearance of calm and stability amid the turmoil of financial markets."
The Federal Open Market Committee (FOMC) statement reflects continual concern over economic growth and the direction of inflation despite the latter showing a slight easing according to a report today by the a Labor Department.
Continue reading Fed leaves rates steady at 2% despite financial turmoil and easing inflation
Inflation eased to 5.4% in the past year, as consumer prices declined 0.1% in August and marked the first decline in nearly two years, according to a Labor Department report released Tuesday.
With inflation’s decline, some economists said the path was paved for a potential interest rate cut after the Federal Reserve’s monthly meeting on Tuesday.
“This frees the Fed’s hands to cut rates, if they deem that to be the right move later today,” said Mark Vitner, senior economist at Wachovia.
“If inflation continued to accelerate, it would make it very difficult for the Fed to cut interest rates,” said Vitner. “But now, if they need to cut interest rates, they will do it.”
Continue reading Inflation eases to 5.4% as consumer prices fall 0.1%
The US Inflation Calculator website has been updated with the latest Bureau of Labor Statistics (BLS) data released Tuesday, September 12. The newest figures show consumer prices rose 5.4% in August from a year ago. On a monthly basis, the Consumer Price Index fell 0.1%.
The Inflation Calculator has been updated to use the latest figures for calculation, as has the following pages:
Consumer Price Index Data from 1913 to 2008
Current Inflation Rates: 1999-2008
Historical Inflation Rates: 1914-2008
Annual Averages for Rate of Inflation
Read Inflation eases to 5.4% as consumer prices fall 0.1% for an in depth look at the released Labor Department data.