Inflation is running above the levels that Bernanke has targeted, but he's holding off on hiking rates because of the risksImagine you're driving a car with a blacked-out windshield and a loose steering wheel. Now imagine that your car is the $13 trillion U.S. economy. That should give you some idea of what it feels like to be Federal Reserve Chairman Ben S. Bernanke. Yes, in a word: scary.
Bernanke and the other members of the Fed's Open Market Committee pleased the stock market Mar. 21 when they voted to keep the federal funds rate at 5.25%, and slightly softened their anti-inflation stance in the accompanying statement. The new statement drops a mention of "any additional firming" of rates that had appeared in previous months' statements (see BusinessWeek.com, 3/21/07, "Stocks Rally After Fed Statement").
A Tough Call for the Fed
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