(August 5, 2008)—With a rising unemployment rate, an ever increasing number of home foreclosures and gyrating energy prices the Federal Reserve has a number of factors to consider as evaluates its monetary policy Tuesday.
The central bank policy makers are faced with the dueling problems of weak economic growth and advancing inflation. Treatment for either one risks aggravating the other, so the Fed is widely expected to leave the key interest rate alone.
If private economists are correct, the Fed's rate will stay at 2 percent and, in turn, the prime lending rate for millions of consumers and businesses will stay at 5 percent.
The prime rate applies to certain credit cards, home equity lines of credit and other lines.