Source:
BloombergBy Craig Torres
June 25 (Bloomberg) -- The Federal Reserve left its benchmark interest rate at 2 percent, ending the most aggressive series of rate cuts in two decades, as higher energy costs threaten to boost inflation.
``The Committee expects inflation to moderate later this year and next year,'' the Federal Open Market Committee said in a statement today in Washington. ``However, in light of the continued increases in the prices of energy and some other commodities and the elevated state of some indicators of inflation expectations, uncertainty about the inflation outlook remains high.''
Fed Chairman Ben S. Bernanke and his colleagues refreshed their forecasts at their two-day meeting and may have concluded the economy is likely to avoid a contraction. At the same time, crude oil prices have almost doubled in the past year and the cost of commodities from wheat to tin jumped to unprecedented levels.
``Although downside risks to growth remain, they appear to have diminished somewhat, and the upside risks to inflation and inflation expectations have increased,'' the Fed added. ``The Committee will continue to monitor economic and financial developments, and will act as needed to promote sustainable economic growth and price stability.''
Read more:
http://www.bloomberg.com/apps/news?pid=20601087&sid=abQ3cIKi7qEQ&refer=home