The Federal Reserve met yesterday and decided to hold interest rates for the fourth time. This was expected, but there are many on Wall Street who are calling for a cut. The Fed noted a significant slowdown in the housing market indicating itis concerned about the overall state of the economy. Here is what the fed stated:

Economic growth has slowed over the course of the year, partly reflecting a substantial cooling of the housing market. Although recent indicators have been mixed, the economy seems likely to expand at a moderate pace on balance over coming quarters.

Readings on core inflation have been elevated, and the high level of resource utilization has the potential to sustain inflation pressures. However, inflation pressures seem likely to moderate over time, reflecting reduced impetus from energy prices, contained inflation expectations, and the cumulative effects of monetary policy actions and other factors restraining aggregate demand.

Nonetheless, the Committee judges that some inflation risks remain. The extent and timing of any additional firming that may be needed to address these risks will depend on the evolution of the outlook for both inflation and economic growth, as implied by incoming information.

Basically, the Fed is still worried about inflation and overall health of the economy. Previous to the last four meetings, the Fed raised interest rates seventeen times in a row as they worked to curb inflation. http://money.cnn.com/2006/12/12/news/economy/fed_rates/index.htm?postversion=2006121214