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 April 17, 2007

Rate Hikes Possible to Curb Inflation Rate
The Federal Open Market Committee is a group of central bank officials make decisions to raise, lower or not to change the federal-funds rate. Minutes from the group's March meeting report that the rate was left unchanged at 5.25%. This decision indicates that policymakers tend to view hikes in rates as a possible way to slow the inflation rate.
There was one report that showed a decline in overall business investments. This information has cast some doubts as to whether or not inflation was on its perceived downward trend.

Bank officials stated that the current uncertain direction of the economy will prompt them to look into alternatives to rate increases in order to curtail the inflation rate.

During the first quarter of this year, rising energy prices were the main cause for overall inflation. The meeting shows that the Federal Reserve continues to predict a decrease in the personal consumption expenditures price index this year.

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