A long stretch of steady rates 

NEW YORK – Jan. 29, 2007 – More and more investors are coming to accept the likelihood that the Federal Reserve will make few, if any, interest-rate changes in 2007.

Many had been hoping for a quick rate cut, which would reduce borrowing costs and foster increased consumption throughout the U.S. economy. Lehman Brothers chief U.S. economist Ethan Harris states that there is a greater chance that the Fed will actually hike rates this year, especially if the present supply of fairly cheap cash throughout the global financial system results in higher inflation at home.

If the central bank does manage to keep rates unchanged for the entire calendar year, it would be the longest such pause since the late 1990s, when the dot-com boom was in full swing.

Wall Street Journal (01/29/07) P. C1; McKay, Peter A.
 

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