Fed Again Holds Interest Rate at 5.25%

For the eight straight time, the Federal Reserve on Thursday voted to keep the benchmark U.S. interest rate at 5.25%.

The vote to hold the federal funds rate unchanged was unanimous.

The Fed said economic growth was “moderate” during the first half of the year, despite ongoing sluggishness in the housing sector.

The Fed last held the rate steady at its May 9 meeting and has not raised the benchmark rate that banks charge each other since last June, when it raised the rate by a quarter-point for the 17th straight time.

Following is the full statement from the Fed:

The Federal Open Market Committee decided today to keep its target for the federal funds rate at 5.25%.

Economic growth appears to have been moderate during the first half of this year, despite the ongoing adjustment in the housing sector. The economy seems likely to continue to expand at a moderate pace over coming quarters.

Readings on core inflation have improved modestly in recent months. However, a sustained moderation in inflation pressures has yet to be convincingly demonstrated. Moreover, the high level of resource utilization has the potential to sustain those pressures.

In these circumstances, the Committee's predominant policy concern remains the risk 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.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; Timothy F. Geithner, Vice Chairman; Thomas M. Hoenig; Donald L. Kohn; Randall S. Kroszner; Cathy E. Minehan; Frederic S. Mishkin; Michael H. Moskow; William Poole; and Kevin M. Warsh.