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US Central Bank Expected to Leave Interest Rates Unchanged - 2003-12-09


Most economists expect U.S. central bank officials to leave the key interest rate unchanged at one percent - a 45-year low - when they meet Tuesday afternoon in Washington.

But investors will be watching the central bank very closely for hints about the timing of future interest rate hikes.

The Federal Reserve last said investors could count on low interest rates "for a considerable period."

Low interest rates, along with tax cuts, are credited with helping the U.S. economy rebound and grow at a roaring 8.2 percent in the third quarter.

The Bush administration says the rapid growth is an encouraging sign that businesses might soon begin hiring new workers. But investors said they were disappointed that last Friday's employment report showed fewer new jobs created than expected.

While low interest rates are likely to eventually help the U.S. employment picture, they are also pushing the value of the U.S. dollar down against other currencies. European interest rates are about double those in the United States, prompting investors to buy up euros, driving the dollar down to record lows.

The announcement from the Fed is due about 1915 UTC.

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