The Federal Reserve Held Interest Rates Steady This Week ...

The Federal Reserve held interest rates steady at 5.25%, leaving them unchanged for more than a year. Their dual-mandate of keeping inflation in check while maintaining full employment in the economy is a delicate balancing act. The latest move signals a slight improvement on the inflationary front but wording by the United States' central bank effectively ended all hope or expectation of a rate cut this year which would instantly raise the intrinsic value of nearly every asset in the U.S. as it effectively lowers the comparable long-term Treasury yield to which everything else must be compared (see blog post from earlier this week for an in-depth explanation of the mechanics.)

Bank stocks have taken a beating over the past year but some long-term investors seem to view these stocks as attractive (witness Warren Buffett and his Berkshire Hathaway company picking up multi-billion dollar stakes in U.S. Bancorp and Wells Fargo & Company as just one example.)