It May Be Hard to Believe, But People Used to Wait in Suspense for Fed Releases...

To absolutely no one's surprise the Fed is standing pat on interest rates:

Information received since the Federal Open Market Committee met in April suggests that the pace of economic contraction is slowing. Conditions in financial markets have generally improved in recent months. Household spending has shown further signs of stabilizing but remains constrained by ongoing job losses, lower housing wealth, and tight credit. Businesses are cutting back on fixed investment and staffing but appear to be making progress in bringing inventory stocks into better alignment with sales. Although economic activity is likely to remain weak for a time, the Committee continues to anticipate that policy actions to stabilize financial markets and institutions, fiscal and monetary stimulus, and market forces will contribute to a gradual resumption of sustainable economic growth in a context of price stability.

The prices of energy and other commodities have risen of late. However, substantial resource slack is likely to dampen cost pressures, and the Committee expects that inflation will remain subdued for some time.

In these circumstances, the Federal Reserve will employ all available tools to promote economic recovery and to preserve price stability. The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period...

Again, not a surprise. As I discussed last week, the United States is likely to see rising levels of inflation, so the Fed funds rate will need to be raised. The Fed faces a difficult problem - if they raise rates too fast and too soon, they risk slowing or reversing the recovery. If they raise rates too slowly or too little, they risk runaway inflation. I must admit, I am glad I am not one of the ones having to make that decision.