The Federal Reserve on Tuesday kept US interest rates unchanged at 5.25 percent but it acknowledged concerns about tightening credit and a persistent housing market slump dogging the US economy.
The central bank has now kept US interest rates steady for just over 13 months. The 10 policymakers of the Federal Open Market Committee, led by Chairman Ben Bernanke, voted unanimously to keep rates unchanged.
In justifying its decision, the Fed said the world's largest economy seems likely to continue expanding at a "moderate" clip, and that its top priority remains the fight against inflationary threats.
PHOTO: AP
But policymakers conceded there were dark clouds looming on the economic horizon.
"Financial markets have been volatile in recent weeks, credit conditions have become tighter for some households and businesses, and the housing correction is ongoing," the Fed said.
"Nevertheless, the economy seems likely to continue to expand at a moderate pace over coming quarters, supported by solid growth in employment and incomes and a robust global economy," the central bank said.
The Fed said future rate decisions would largely depend on the outlook for inflation and economic growth.
"Although the downside risks to growth have increased somewhat, the committee's predominant policy concern remains the risk that inflation will fail to moderate as expected," the central bank said.
Fears about mortgage failures and tightening credit have sparked volatile trading on US stock markets in the past week.
Recent reports have suggested the worst of the housing downturn, which has also afflicted mortgage lenders, may be far from over.
Some market watchers say a rate cut might not benefit the distressed housing market.
Central bankers typically cut interest rates when housing markets slow to aid homeowners, but persistent inflation concerns have stopped the Fed cutting rates in the past year.
DEFENDING DEMOCRACY: Taiwan shares the same values as those that fought in WWII, and nations must unite to halt the expansion of a new authoritarian bloc, Lai said The government yesterday held a commemoration ceremony for Victory in Europe (V-E) Day, joining the rest of the world for the first time to mark the anniversary of the end of World War II in Europe. Taiwan honoring V-E Day signifies “our growing connections with the international community,” President William Lai (賴清德) said at a reception in Taipei on the 80th anniversary of V-E Day. One of the major lessons of World War II is that “authoritarianism and aggression lead only to slaughter, tragedy and greater inequality,” Lai said. Even more importantly, the war also taught people that “those who cherish peace cannot
STEADFAST FRIEND: The bills encourage increased Taiwan-US engagement and address China’s distortion of UN Resolution 2758 to isolate Taiwan internationally The Presidential Office yesterday thanked the US House of Representatives for unanimously passing two Taiwan-related bills highlighting its solid support for Taiwan’s democracy and global participation, and for deepening bilateral relations. One of the bills, the Taiwan Assurance Implementation Act, requires the US Department of State to periodically review its guidelines for engagement with Taiwan, and report to the US Congress on the guidelines and plans to lift self-imposed limitations on US-Taiwan engagement. The other bill is the Taiwan International Solidarity Act, which clarifies that UN Resolution 2758 does not address the issue of the representation of Taiwan or its people in
US Indo-Pacific Commander Admiral Samuel Paparo on Friday expressed concern over the rate at which China is diversifying its military exercises, the Financial Times (FT) reported on Saturday. “The rates of change on the depth and breadth of their exercises is the one non-linear effect that I’ve seen in the last year that wakes me up at night or keeps me up at night,” Paparo was quoted by FT as saying while attending the annual Sedona Forum at the McCain Institute in Arizona. Paparo also expressed concern over the speed with which China was expanding its military. While the US
‘FALLACY’: Xi’s assertions that Taiwan was given to the PRC after WWII confused right and wrong, and were contrary to the facts, the Ministry of Foreign Affairs said The Ministry of Foreign Affairs yesterday called Chinese President Xi Jinping’s (習近平) claim that China historically has sovereignty over Taiwan “deceptive” and “contrary to the facts.” In an article published on Wednesday in the Russian state-run Rossiyskaya Gazeta, Xi said that this year not only marks 80 years since the end of World War II and the founding of the UN, but also “Taiwan’s restoration to China.” “A series of instruments with legal effect under international law, including the Cairo Declaration and the Potsdam Declaration have affirmed China’s sovereignty over Taiwan,” Xi wrote. “The historical and legal fact” of these documents, as well
RSS