Inflation Still on Fed's Radar

Updated from 2:15 p.m. EDT

Federal Reserve policymakers again left their fed funds target rate at 5.25% Wednesday, marking the seventh straight time the central bank has met and agreed to no change.

The decision wasn't a surprise, as economists and investors had been expecting rates to be kept at the same level where they've been since last June. The fed funds rate is used by banks to charge each other interest on overnight loans.

"Economic growth slowed in the first part of this year and the adjustment in the housing sector is ongoing," the Fed said in a statement that followed the gathering. "Nevertheless, the economy seems likely to expand at a moderate pace over coming quarters."

The Fed didn't say anything new that would suggest it could be preparing to lower rates anytime soon. Economic data have been mixed for months, and officials have been careful with their language to avoid misleading the market as to what their intentions might be.

"Core inflation remains somewhat elevated," the Fed's statement continued. "Although inflation pressures seem likely to moderate over time, the high level of resource utilization has the potential to sustain those pressures."

For now, the Fed said its primary concern is that inflation will fail to moderate as expected. "Future policy adjustments will depend on the evolution of the outlook for both inflation and economic growth, as implied by incoming information," the Fed said.

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