Fed maintains interest rate

Fed maintains interest rate
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US central bank the Federal Reserve has decided to maintain its two percent interest rate despite the current banking crisis. Speculation had been rife that the recent Wall Street convulsions which have taken down two of the largest investment banks in 24 hours would have pushed the Fed into action.

Although policy makers had not indicated any change, the market turmoil is making it harder for consumers and companies to borrow and is set to push unemployment higher… both factors which could have been expected to influence the Fed.

Despite the central bank’s decision, the US economy is in a volatile state, recession is knocking at the door and the financial system faces new deflationary threats in the wake of the banking turmoil.

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