In a statement released today that can be accessed at the Federal Reserve Board Website it was announced that the Feds are going to keep interest rates at 5.25%.

The Federal Open Market Committee decided today to keep its target for the federal funds rate at 5-1/4 percent.

Economic growth has slowed over the course of the year, partly reflecting a cooling of the housing market. Going forward, the economy seems likely to expand at a moderate pace.

The FOMC monetary policy faced only one dissenting vote. Voting against was Jeffrey M. Lacker, who preferred an increase of 25 basis points in the federal funds rate target at this meeting.

Wednesday August 9, 2006 The FTC (Federal Trade Commission) and the Federal Reserve Board issued a joint report to Congress on compliance with the consumer dispute provisions of the Fair Credit Reporting Act.

According to a study conducted by the FTC and the Board, although consumer disputes are being processed within the statutory timeframe, there is some disagreement regarding the adequacy of the investigations performed by the Credit Reporting Agencies and the furnishers of information.

No action is being taken at this time as a result of the report but the FTC and the Board will continue to monitor the dispute process, possibly making recommendations for future action if appropriate.

As expected, the Federal Reserve opted not to raise interest rates hoping to keep inflation down in the flagging economy. The FOMC has announced it will keep its Federal Funds rate target at 5.25 percent.

The statement released today indicated that this was a pause rather than a halt in rate hikes and expressed the opinion that inflation pressures may moderate over time thus implying that rate hikes in the future cannot be ruled out.

The pause by the Fed was not unexpected by investors, although the possibility of future rate increases was disappointing and stocks slipped after the announcement.

The July jobs report, released on August 4, 2006, showed a rise in unemployment and that the growth of new jobs was smaller than expected.

Unemployment rose to 4.8% in July, taking the bloom off the rosy economic picture at the close of the second quarter for some. The likelihood is that the Federal Reserve Board, which meets this Tuesday, will put a hold on interest rate increases in order to keep inflation from becoming a runaway. The stock market reacted to the probable pause with an initial surge but only momentarily. The possibility that the economy was slowing outweighed the short term benefits of the anticipated rate pause.

The view from the administration was more optimistic. Commerce Secretary Carlos Gutierrez seemed hopeful in spite of the hike in the unemployment rate, pointing to the 113,000 new jobs that were created.

“With the addition of 113,000 jobs and increasing wages, today’s employment report shows President Bush’s economic policies are working for American workers. Since 2004, the U.S. has created more jobs than the rest of the G-7 countries combined. Our economy has grown a strong 4.0 percent this year” Gutierrez declared during a visit to a power tool manufacturing facility in Virginia Beach, VA. “We will continue to advance the President’s economic policies of keeping taxes low and spending down in order to create jobs and opportunities for U.S. families and businesses,” he added.