Feds Stand Pat on Interest Rates

Today's move was not much of a surprise. However, I found the release itself quite interesting. The common wisdom was that, at some point in 2008, the Fed would have to start raising rates to fight inflation. However the release suggests that while future rate hikes are quite likely, they are not a certainty (or at least, that is how I read the annoucement):

Recent information indicates that overall economic activity continues to expand, partly reflecting some firming in household spending. However, labor markets have softened further and financial markets remain under considerable stress. Tight credit conditions, the ongoing housing contraction, and the rise in energy prices are likely to weigh on economic growth over the next few quarters.

The Committee expects inflation to moderate later this year and next year. However, in light of the continued increases in the prices of energy and some other commodities and the elevated state of some indicators of inflation expectations, uncertainty about the inflation outlook remains high.

The substantial easing of monetary policy to date, combined with ongoing measures to foster market liquidity, should help to promote moderate growth over time. Although downside risks to growth remain, they appear to have diminished somewhat, and the upside risks to inflation and inflation expectations have increased. The Committee will continue to monitor economic and financial developments and will act as needed to promote sustainable economic growth and price stability.

Also note that my fellow inflation hawk Fisher voted for a rate hike (he was the only one to do so).