Reasons Not to Lower 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. (Ensure the dollar does not tank)
- Recession Fears "The moderation in economic growth appears to be continuing"
- Don't want to cause a meltdown in the housing market. As the housing market activity is already "cooling considerably"
It is very likely that captain Bernanke will, once again, hold rates steady later this month. They are in a very tough position.