For the time being, short-term interest rates will remain the same at 5.25 percent. In a much anticipated announcement, the Federal Reserve Bank said Tuesday that, although it would not raise rates, it indicated that rates may indeed rise should inflation occur.
Also unchanged was the discount rate, which will remain at 4.75 percent. The discount rate is used by the Federal Reserve's 12 district banks who provide direct loans to banks and financial institutions.
Should rates have risen, this would have been the third time in 1999. Typically, the Fed raises rates to slow down the economy and keep inflation to its minimum.