The Federal Reserve Board decided today (Dec. 19) to leave interest rates unchanged, although, now, it is more worried about a recession than about inflation.
The Fed has not changed interest rates since May but, until today, it said it was more worried about inflation, which meant more rate increases were likely. It raised rates six times beginning late in 1999 until May to prevent inflation from accelerating.
But several economic analysts believe the language the Fed used today makes an interest rate cut during the Fed’s next meeting on Jan. 30-31 almost a certainty.
Most analysts assumed the Fed would leave rates unchanged today. But in the last few days, some analysts said the Fed should lower rates today, because the economy is cooling off so rapidly.