Fed's Rate Cut Could Be Last For a While
By Greg Ip
Word Count: 1,091
The Federal Reserve cut interest rates by a quarter point, but with an eye on surging energy prices and other inflationary threats, it strongly discouraged expectations of further cuts.
The decision, following a half-point cut six weeks ago, shows Fed Chairman Ben Bernanke is grappling with risks on two fronts: Plunging home construction and eroding real-estate values could hit the broader economy, while rising oil and commodity prices, combined with a falling dollar, could spoil the Fed's hopes to contain inflation.
Developments yesterday underlined the tension. Though data showed the U.S. economy growing at a faster-than-expected 3.9% annual rate in ...