Economists expect Fed to keep rates unchanged

0 Comments | AFP, August, 2008

WASHINGTON (AFP) — Federal Reserve governors met Tuesday to mull interest rates and the health of the US economy with most economists predicting the Fed will keep rates on hold at 2.0 percent for a second straight time.

The central bank is due to announce its rate decision around 1815 GMT.

Economists said the Federal Open Market Committee (FOMC) will likely stand firm, despite a government report Monday showing a cooldown in consumer spending and a spike in inflation pressures.

Analysts say the Fed is caught between a rock and a hard place because a cut in the federal funds rate could spur inflationary pressures while a rate hike could stymie fragile economic growth.

"We expect the Fed to leave interest rates unchanged," Deutsche Bank economists said...