To pause or not to pause? Fed puts off question

0 Comments | AFP, May, 2008

WASHINGTON (AFP) — The Federal Reserve delivered an expected quarter-point rate cut on Wednesday but disappointed those who had been seeking a clear signal for a pause following a series of aggressive rate moves.

The action lowered the federal funds rate to 2.0 percent, down sharply from 5.25 percent last September as the central bank offered more monetary stimulus to a sputtering US economy.

The move by the Federal Open Market Committee (FOMC) had been widely expected, but its statement highlighting concerns on both growth and inflation drew various interpretations.

Many analysts had been expecting the central bank and chairman Ben Bernanke to signal a halt in its rate-cutting cycle. Economist Stephen Gallagher at Societe Generale said the latest statement...