Interest Rates Won’t Change Soon

Federal Reserve policymakers, who are likely to leave interest rates unchanged tomorrow, may increase borrowing costs as soon as their next meeting in July if the economy perks up and inflation threatens, analysts said.

For now though, there isn’t enough evidence of runaway growth or higher inflation to trigger a change at tomorrow’s session of the Federal Open Market Committee. While housing starts continue to rise, industrial production is mixed, and inflation indices are showing few signs of change outside of a temporary surge in energy costs. Labor costs, which account for about two-thirds of consumer prices, are also restrained.And in commodity markets Monday, copper prices fell to the lowest level in more than five weeks. Demand for copper is considered an important gauge of inflation because of its wide range of use from the factory floor to the home.