Fed to leave rates unchanged amid economic uncertainty

0 Comments | AFP, August, 2008

WASHINGTON (AFP) — A powerful US central bank panel, led by Federal Reserve chairman Ben Bernanke, is widely expected to keep its key interest rate unchanged in the coming week amid growing economic uncertainty.

Most economists are betting that the Federal Open Market Committee (FOMC) will keep the federal funds rate firmly anchored at 2.0 percent amid lackluster economic growth.

Analysts say the Fed is caught between a rock and a hard place because a cut in rates could trigger fresh inflationary pressures while a rate hike could strangle fragile economic momentum.

Thus, Bernanke and his fellow central bankers are expected to sit on their hands during a policy meeting set for Tuesday.

"I think the Fed is going to stand on the sidelines holding at 2.0...