WASHINGTON — Citing a credit crunch and soft labor market, theFederal Reserve's Open Market Committee voted 9-1 Wednesday to keepinterest rates the same.
“Upside risks to inflation and inflation expectations haveincreased,” the Fed said in a policy statement. “In light of thecontinued increases in the prices of energy and some othercommodities and the elevated state of some indicators of inflationexpectations, uncertainty about the inflation outlook remainshigh.”
The decision keeps the rate banks use when lending to eachother, at 2%. It's the first time the committee has left ratesunchanged since last summer. The panel has voted rate reductionsseven consecutive times.
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