Fed Leaves Rates UnchangedThe Federal Reserve left a key interest rate unchanged on June 28 in a decision widely expected by economists and Wall Street analysts. Amid signs that the red-hot economy may be cooling a bit, the Federal Open Market Committee (FOMC), the Fed's policymaking arm, left its target for the federal funds rate, which banks charge each other for overnight loans, at 6.5%. It also left the mostly symbolic discount rate on Fed loans to banks unchanged at 6%. In the statement accompanying the announcement Wednesday, the Fed said that "rapid advances in productivity have been containing costs and holding down underlying price pressures." But it warned that ongoing imbalances in the economy could "generate heightened inflation pressures in the foreseeable future" - suggesting the FOMC may raise rates when it meets next in August.
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