The Fed kept rates unchanged in a dilemma.

Cut interest rates 7 times in a row, the U.S. Federal Reserve decided to maintain the 25 federal funds rate unchanged. .This decision can be said that the Fed "double attack" under the upset. .<P> The so-called "double attack" refers to the economic downside risk and upside risks to inflation. .Since last year, along with the continuing deterioration of subprime mortgage crisis and market downturn panic filled the air, "save" the U.S. economy has become overwhelming task. .Fed rate cut and the Bush administration's stimulus package, that is, both from the perspective of monetary and fiscal intervention, hoping to avoid the U.S. economy into recession. .<P> The effectiveness of these policies, the Fed's statement on the 25th that the U.S. economy remain downside risks, but it is "eased." .This has also been recognition of the International Monetary Fund. .The organization in a recent report that the U.S. economy cooling degree lower than the original "panic" is expected, although still facing serious challenges, the U.S. government's positive initiatives to avoid at least the overall deterioration of the crisis. .But the Fed cut interest rates <P> continuous policy also had a negative effect. .Some economists noted that the rate cut and other measures led to the weak dollar, increased oil, grain and other commodity prices, the upside risks to inflation in the U.S. Therefore, increased dramatically. .<P> Severe inflation risk situation compelled the Fed to be vigilant on inflation. .25-day statement, the Fed noted that the upside risks to inflation in the United States increase, based on energy and other commodity prices to continue rising and rising inflation expectations, "the uncertainty of the inflation outlook remains high." .<P> Downside risks in the economy and upside risks to inflation in the double attack, making the challenges currently facing the Fed. .Prevent the economy from the perspective of a recession, the Fed should continue to cut interest rates to stimulate economic growth; but from the point of view to avoid the worsening of inflation, the Fed should raise interest rates decisively. .In such a dilemma, the Fed finally 25, 9 to 1 vote and decided to keep interest rates unchanged. .<P> In the voting, the Dallas Federal Reserve Bank President Richard Fisher and by advocating an immediate interest rate increase voted against. .In fact, with the rise of the threat of inflation, the Fed cut interest rates within the requirements of suspension and, in turn interest rates are increasing calls. .<P> Leaves Cameroon economists believe the Fed move is "do everything." ."Taking into account the inflation situation, it can not be cut; take into account the fragile economic and financial environment, it can not raise interest rates," so we can only keep rates unchanged. .<P> Some economists believe that the upside risks to inflation than in the current downside risks to economic circumstances, the policy of the Federal Reserve left interest rates unchanged may indicate their "rate cut cycle" in the end, or even do not rule out from this into the "plus .interest rate cycle, "the possibilities. .The U.S. labor market still further weakness, the financial markets remain under considerable pressure. .In addition, the credit crunch, housing market, such as contraction and energy prices are likely to adversely affect the U.S. economy. .In this case, the Fed raising interest rates is certainly not conducive to U.S. economic recovery. .<P> Economists generally believe that how to both prevent further aggravate inflation, while alienating even further deterioration of the subprime mortgage crisis in the U.S. economy into recession, the Fed will be in the future for a long period of time must be solved. .</ P>.