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Federal Interest Rates

By: Associated Press
By: Associated Press

Even though the U.S. economy appears to be improving, don't expect Alan Greenspan to change interest rates when the Federal Reserve meets this Tuesday.

That's because policy-makers don't want to spook jittery bond investors into thinking the faster growth will lead the central bank to start raising interest rates.

Economists are predicting no change in the benchmark federal funds rate, which is at one-percent, a 45-year low.

Normally, stronger economic growth would cause the Fed to nudge rates higher to make sure that increased demand for goods and services didn't cause inflation to rise.

But because of the fragile job market, analysts say the Fed will be cautious about raising interest rates, more so because there are no signs inflation is getting out of control.


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