Federal Reserve Holds Rates at 2%
Updated from 2:14 p.m. EDT
The Federal Reserve held its key interest-rate target steady Tuesday, indicating that the central bank's decision to support economic growth with a 2% target, rather than thwart inflation with rate hikes, has gone according to plan.
The Federal Open Market Committee noted that the job, credit and housing markets remain under stress and that high energy prices threaten to put pressure on future economic growth. However, it reiterated its position that the economy will stay afloat with the initiatives already put in place.
"Over time, the substantial easing of monetary policy, combined with ongoing measures to foster market liquidity, should help to promote moderate economic growth," the FOMC said in a statement.While economic output remained positive in the second quarter -- with GDP growing a less-than-expected 1.9% -- that growth was driven in part by consumer spending that was boosted by federal tax rebates. Now that most of those checks have been spent, boosting economic activity in the latter half of the year may prove more challenging. The market had largely expected the Fed's move -- or lack thereof -- having already sent the Dow Jones Industrial Average up more than 200 points early Tuesday as oil futures dropped below $118 per barrel and a report showed better-than-expected performance in the services sector. "This should be seen as more of a nonevent -- really a continuation of what we've seen coming from the Fed for a while," says Jason Pride, director of research for Radnor, Pa.-based Haverford Investments.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV