Key Rate May Rise, Fed Report Suggests

Washington Post (08/27/08) P. D2; Aversa, Jeannine
Federal Reserve policymakers decided to hold their key interest rate steady at 2 percent for their August meeting, although most did not consider it too low, according to documents that also suggest the next action will be to raise rates. Released on Aug. 26, the documents reveal that "members generally anticipated that the next policy move would likely be a tightening" and indicate that economic growth and inflation would determine the timetable for any hikes. The Fed is unlikely to raise rates to reign in inflation until next year, according to most economists. Fed Chairman Ben Bernanke has suggested that the central bank will hold rates at 2 percent for the September meeting and for the rest of this year.