At the end of their two day meeting in Washington DC, Federal Reserve policymakers kept the cost of borrowing in the United States unchanged. Fed Chairman Ben Bernanke and his colleagues remain primarily concerned about the risk that inflation could flare up again as they assessed the current and future performance of the US economy.
The Fed’s benchmark lending rate has now been held at 5.25% for almost exactly one year. During that time the UK rate has risen to 5.5% and in the euro zone has gone up to 4%. The rate in Japan edged up to 0.5%.
The information that the Fed used to make the decision included revised data for one US inflation gauge – core personal consumption spending. It was shown to have risen more than economists had forecast in the first three months of the year while the US economy grew at an annual pace of just 0.7% in the first quarter, the weakest in more than four years.