Fed Likely to Hold Rates— for Now

Bernanke hopes the 2% interbank rate will help economy rebound
By Jim O'Neill,  Newser User
Posted Jun 25, 2008 6:17 AM CDT
High gas prices posted at Shell, left, and Valero, right, gas station in San Bruno, Calif.    (AP Photo/Paul Sakuma)
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(Newser) – Despite fears that inflationary forces are revving, the Federal Reserve will probably hold the interbank federal funds rate at 2% today, hoping the bargain basement rate can help kick-start a stalled economy that’s been hamstrung by a tenacious housing slump and a credit crunch hangover, Reuters reports.

"Given the uncertainty about both upside and downside risks, the Fed is likely to stay on hold indefinitely," Deutsche Bank economists told clients.