This week's In the News looks at the recent Federal Reserve Board decision to leave interest rates unchanged. The eight resources discussed provide background information on interest rates and inflation, Federal Reserve news, and current US economic data. With the stock market at record highs and global economic crises fading, the Federal Reserve Board (FRB) showed increased concern about the risk of inflation this month at a May 18, 1999 meeting of the Federal Open Market Committee (FOMC). Although committee members ultimately decided not to raise the rate at which banks lend to each other, they cited a "tight" domestic labor market and "ongoing strength in demand in excess of productivity gains" as possible reasons for future rate hikes. Wall Street reacted to the Fed news with a 100 point Dow Jones Industrial Average fall on May 18 but recovered by the end of the day down just 16.52, and many market watchers expressed optimism over the FOMC action. Irwin Kellner, chief economist at CBS.MarketWatch.com, for example, deemed the decision "great" and praised the Fed for a flexible policy that is not locked into a particular course of action should the economy change unexpectedly.


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