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| Version 2 | Version 3 |
|---|---|
| Fed keeps US rates steady at 2% | Fed keeps US rates steady at 2% |
| (40 minutes later) | |
| Key US interest rates have been held at 2% in an expected move, amid signs of continuing problems in the housing market and falling consumer confidence. | Key US interest rates have been held at 2% in an expected move, amid signs of continuing problems in the housing market and falling consumer confidence. |
| Analysts have pointed out the Federal Reserve faces a difficult balancing act as it tries to cope with rising prices and a slowing economy. | Analysts have pointed out the Federal Reserve faces a difficult balancing act as it tries to cope with rising prices and a slowing economy. |
| US consumer confidence is reportedly at its lowest level in 16 years. | US consumer confidence is reportedly at its lowest level in 16 years. |
| And a major survey suggested house prices were substantially lower in April, compared with a year earlier. | And a major survey suggested house prices were substantially lower in April, compared with a year earlier. |
| The main federal funds rate, at which banks charge each other, has been kept at 2%, marking the first time in 10 months the Fed has failed to reduce interest rates. | The main federal funds rate, at which banks charge each other, has been kept at 2%, marking the first time in 10 months the Fed has failed to reduce interest rates. |
| 'Inflation expectations' | 'Inflation expectations' |
| In a statement the central bank's chairman Ben Bernanke and his colleagues alluded to the threats to growth and worries about rising inflation pressures. | In a statement the central bank's chairman Ben Bernanke and his colleagues alluded to the threats to growth and worries about rising inflation pressures. |
| They said the downside risks to growth "appear to have diminished somewhat" but that "the upside risks to inflation and inflation expectations have increased." | They said the downside risks to growth "appear to have diminished somewhat" but that "the upside risks to inflation and inflation expectations have increased." |
| Analysts have suggest the next move in rates could now be upwards in an attempt to tackle inflation. | Analysts have suggest the next move in rates could now be upwards in an attempt to tackle inflation. |
| The latest decision was approved by a 9-1 vote with Richard Fisher, president of the Fed's regional bank in Dallas, calling for a rise in interest rates now to fight inflation. | The latest decision was approved by a 9-1 vote with Richard Fisher, president of the Fed's regional bank in Dallas, calling for a rise in interest rates now to fight inflation. |
| "The Fed is going to need to start hiking interest rates at some point to start to deal with inflation," said Matt King, chief investment strategist with Bell Investment Advisors. "That's a bigger risk than recession." | |
| Property woes | Property woes |
| However some economists say that raising rates could worsen the economic slowdown caused by crises in the credit and housing markets, economists suggest. | However some economists say that raising rates could worsen the economic slowdown caused by crises in the credit and housing markets, economists suggest. |
| It is a situation that the head of the International Monetary Fund, Dominique Strauss-Kahn, recently described as being caught between "fire and ice". | It is a situation that the head of the International Monetary Fund, Dominique Strauss-Kahn, recently described as being caught between "fire and ice". |
| In the housing market, property prices fell by their fastest rate since 2000, according to the Case-Schiller home price index released on Tuesday. | In the housing market, property prices fell by their fastest rate since 2000, according to the Case-Schiller home price index released on Tuesday. |
| The latest reading of US consumer sentiment has also showed conditions worsening. | The latest reading of US consumer sentiment has also showed conditions worsening. |
| Higher food and fuel prices and fears over the economy, jobs and wages mean that US consumers' expectations for the next six months are at an all-time low, according to the Conference Board, which polls 5,000 households monthly. | Higher food and fuel prices and fears over the economy, jobs and wages mean that US consumers' expectations for the next six months are at an all-time low, according to the Conference Board, which polls 5,000 households monthly. |