The Federal Reserve left interest rates alone for the first time in two years, hoping the economic slowdown will throttle inflation.  It wasn’t unanimous as one Federal Reserve Bank of went against it stating that some inflation risks remain.  However we should remember that a pause is not a stop as the Fed is divided in its action.

As inflation recently topped the informal "comfort zone" of 1% to 2% , mainly due to firms passing higher energy costs on to consumers.  With the housing market and consumer spending to cool off, the Fed believe business investment and exports will pick up the slack.  However, recent data contradict that view.  Since inflation has gone up, new data hints that pressures have been active longer than experts thought.

One thing is for sure, the Feds are not doing what they did fifteen years earlier when they raised interest rates too much and halted the economy.