Fed Reserve is Trapped

The Federal Reserve Board decided to leave rates unchanged at 5.25%. This was the second meeting in a row where they decided to pause.

Reasons To Raise Rates:

• Inflation Worries. As "readings on core inflation have been elevated, and the high levels of resource utilization and of the prices of energy and other commodities have the potential to sustain inflation pressures."
• Attract Inflow of Foreign Capitol.
  

Reasons To Lower Rates:

• Recession Fears "The moderation in economic growth appears to be continuing"
• Don't want to cause a meltdown in the housing market. As there is already "a cooling of the housing market.
  

The Federal Reserve Board is trapped. They are in a very tough position. I don't blame Ben Bernanke as it was Al Greenspan who created this conundrum.