Rates Expected to Hold Steady Until ‘09
It is believed by former Federal Reserve officials and economists that the central bank will hold the short-term interest rates steady at least in August and September. Also, that the rates likely will not be raised until early 2009. Even though recent reports on inflation have been dismal, the central bank has also taken a tough stance in its language of late. The financial markets are more of a concern because of the problems at Fannie Mae and Freddie Mac. Analysts say the housing slump and tight credit conditions remain key economic issues for the Fed.
“They need to see financial markets settled, some good growth numbers, or good employment numbers,” says Mike Moran, chief economist at Daiwa Securities International in New York.
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