WASHINGTON, Jan. 31 (UPI) -- The U.S. Federal Reserve left interest rates unchanged Wednesday, as it has since June, and signaled rates would likely stay put for some time.
In leaving the federal funds rate on overnight loans between banks at 5.25 percent, Fed Chairman Ben Bernanke and his colleagues said their predominant concern was inflation, which the Fed said could be pushed upward by the nation's low unemployment rate.
A possible interest-rate increase to fight inflation pressures would "depend on the evolution of the outlook for both inflation and economic growth," as indicated by economic figures and other information, the Fed statement accompanying the rate announcement said.
"Core" inflation, excluding volatile food and energy prices, has "improved modestly ... and inflation pressures seem likely to moderate," the statement said.
Consumer prices have risen about 2.4 percent over the past year but the rate of growth has slowed in recent months.
"Recent indicators have suggested somewhat firmer economic growth," the Fed said, "and some tentative signs of stabilization have appeared in the housing market. Overall, the economy seems likely to expand at a moderate pace over coming quarters."
The U.S. Commerce Department said earlier in the day the U.S. economy grew at a strong annual rate of 3.5 percent in the final quarter of 2006.
