Rates Hold Steady

Fed Holds Rate Steady as Inflation Worries Rise Wall Street Journal
(06/26/08) P. A1; Reddy, Sudeep The Federal Reserve on June 25 ended its
aggressive campaign of interest rate cuts, holding its target for the
federal-funds rate-charged on overnight loans between banks-at 2 percent.
The decision to stand pat contrasts with recent actions by numerous central
banks overseas that have begun hiking interest rates amid inflation
concerns. The Fed’s move to keep rates in a holding pattern could prevent
mortgage rates from rising further and help attract home buyers to the
market. U.S. house prices are down nearly 18 percent from their July 2006
peak, inventories are still high and industry observers say new-home
construction is likely to fall further before the market returns to a
balanced state.