The Fed: Doing Good by Doing Nothing

Hemmed in by worries about inflation and a sluggish economy, the central bank's best bet is to keep rates steady

In this frenetic world, where action is often a substitute for thought, sometimes the right thing to do is nothing at all. Federal Reserve Chairman Ben Bernanke has taken that phlegmatic message to heart. On May 9, he and the other nine members of the Fed's Open Market Committee voted unanimously to do diddly-squat about interest rates. They didn't raise rates. They didn't lower rates. They left the target federal funds rate on overnight interbank loans precisely unchanged at 5.25%—as they have in each of their last seven meetings going back to last August.

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