Fed Leaves Short-term Rate at 2 percent

From Realtor Magazine Online, Daily Real Estate News June 26, 2008

The Federal Reserve voted 9 to 1 for the status quo, leaving its key rate at 2 percent, with Richard Fisher, president of the Fed’s regional bank in Dallas dissenting. Fisher preferred an interest rate increase to fight inflation.

The Fed’s decision will keep short-term borrowing costs on consumer and business loans unchanged. Mortgages are more closely tied to long-term Treasury rates, but can be affected by short-term rates.

Some analysts believe the Fed will start raising rates at its next meeting in August because of concerns about inflation. Other economists argue that the weak economy and rising unemployment will keep the Fed on the sidelines until at least after the November elections.

Source: The Associated Press, Martin Crutsinger (06/25/2008)