Interest Rates: Will the Fed Hike Rates?

Even as they grappled with inflation worries, most Federal Reserve officials at their August meeting didn’t believe the Fed’s key interest rate was too low given harder-to-get credit conditions straining consumers and businesses alike.

The Fed, at its Aug. 5th meeting, decided to hold its key rate steady at 2% for the second straight meeting. Confronted by problems at every turn — rising unemployment, shaky growth, credit troubles and creeping inflation — the Fed took a gamble that once again the best move was none at all.

Some analysts believe, looking ahead, the next direction for rates is probably up. Fed Chairman Ben Bernanke recently signaled that rates would likely stay at 2% at the Fed’s next meeting on Sept. 16, and probably through the rest of this year. Some fear that keeping rates at this level, a four-year low, could aggravate inflation down the road.

What do you think? Will the Fed be pressured into raising rates in the foreseeable future? Or will they play it low-key until after the elections in November? We’d love to hear your opinion. Just use the "comment" link below to sound off on this topic.