This was good news to Wall Street, who exploded with cheers when they heard the news. With oil on the decline, the
market was already doing well before the news was announced, but even did better once it was.
After making seven consecutive rate cuts since September of 2007, this is the second time they have decided to
not cut rates. In general, rates are cut when there are signs of the economy slowing, which usually ignites
spending. On the other hand, rates are usually increased when there is a concern about inflation. What makes
this time period so unique is the fact that we are facing both a slowing economy and inflation pressures.
Although the Federal Reserve is not expecting too much inflation, they do think that there will continue to
be an economic slowdown, mostly due to rising energy prices and the housing crisis.
Either way, Rates are not expected to change until after the presidential election.
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