The Federal Reserve left the rate banks charge each other for overnight loans at 5.25 percent Thursday, saying that despite an “ongoing adjustment in the housing sector,” the economy seems likely to continue to expand at a moderate pace.

Many companies involved in building and selling homes have hoped the Federal Reserve would lower the federal funds rate this year, which could make it cheaper for home buyers to take out mortgage loans.

But members of the Federal Reserve’s Open Market Committee have elected to leave it unchanged for the last 12 months because of worries about inflation.

If anything, some of the committee’s recent statements have emphasized that the risk of runaway inflation could necessitate a rate increase.

In a statement explaining Thursday’s unanimous decision to leave the federal funds rate unchanged, the committee acknowledged that readings on core inflation “have improved modestly in recent months.” However, the committee said, “a sustained moderation in inflation pressures has yet to be convincingly demonstrated. Moreover, the high level of resource utilization has the potential to sustain those pressures.”

Show Comments Hide Comments

Comments

Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
Success!
Thank you for subscribing to Morning Headlines.
Back to top
×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription