Fed Keeps Rate at 5.25%, Abandons Tightening Bias

[swag]

Source: Bloomberg

By Craig Torres

March 21 (Bloomberg) -- The Federal Reserve kept the benchmark U.S. interest rate at 5.25 percent and unexpectedly abandoned its tilt toward higher borrowing costs.

``Future policy adjustments will depend on the evolution of the outlook for both inflation and economic growth,'' the Federal Open Market Committee said today in Washington. While inflation is the ``predominant'' concern, the statement dropped a reference to ``additional firming,'' language used since June.

Policy makers said recent economic indicators have been ``mixed'' and the ``adjustment'' in the housing industry is continuing. Nevertheless, ``the economy seems likely to continue to expand at a moderate pace over coming quarters.''

The language suggests officials see substantial risks of a further economic slowdown that will reduce inflation pressure over time, warranting a more balanced outlook. Traders may interpret the change as a signal that the Fed will consider cutting rates by either the May or June policy meetings.

. . .

Read more: http://www.bloomberg.com/apps/news?pid=20601087&sid=aRfXPG9pszQo&refer=home

[MikeNearMcChord]

1. Call me an Art Bell nut.

But is the Fed postponing the day of reckoning, until a Democrat candidate becomes president?:tinfoilhat:

[swag]

2. You're an Art Bell nut.