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The Federal Reserve decided Tuesday (May 6) to leave interest rates unchanged because it is confident economic conditions will improve.
As a result, the prime rate, to which many RV dealers’ inventory finance loans are pegged, remains at 4.25%, its lowest level since 1958.
The Fed has not changed interest rates since Nov. 7, when it cut the rate to 0.5% lowering of the prime to its current level.
In a statement issued Tuesday, the Fed said that although “the timing and extent” of an economic recovery remains uncertain, it believes “that over the next few quarters the upside and downside risks to the attainment of sustainable growth are roughly equal.”
Now that hostilities in Iraq are winding down, the Fed noted, oil prices are sliding lower and consumer confidence is improving. Consequently, it believes the current low-interest rate environment “should foster improving economic conditions over time.”
The next regularly scheduled fed meeting will be June 24-25.