Fed holds rates steady at 5.25%

WASHINGTON – The Federal Reserve’s governing body today decided to leave its target for the federal funds rate unchanged, at 5.25 percent. The decision was supported by 11 of the Federal Market Committee’s 12 members.
“Recent indicators have suggested somewhat firmer economic growth, and some tentative signs of stabilization have appeared in the housing market,” the FOMC said in its statement this afternoon.
“Overall, the economy seems likely to expand at a moderate pace over coming quarters.
“Readings on core inflation have improved modestly in recent months, and inflation pressures seem likely to moderate over time. However, the high level of resource utilization has the potential to sustain inflation pressures.
“The Committee judges that some inflation risks remain. The extent and timing of any additional firming that may be needed to address these risks will depend on the evolution of the outlook for both inflation and economic growth, as implied by incoming information,” the panel concluded.
Stocks rallied on the news, driving the Dow Jones Industrial Average to one point short of a new record, Bloomberg News said. The Dow closed up 98.38 points, or 0.8 percent, at 12,621.69; the Standard &Poor’s 500, up 9.42, or 0.7 percent, at 1438.24; and the Nasdaq Composite, up 15.29 points, or 0.6
Additional information on the Fed and the FOMC can be found at www.federalreserve.gov.