The U.S. Federal Reserve left its key overnight interest rate unchanged Tuesday, surprising no one.

For the fourth consecutive time, the Fed kept its federal funds rate at 5.25 per cent — exactly where it's been since June.

Federal Reserve Board chair Ben Bernanke has left U.S. interest rates unchanged since June.
(Jae C. Hong/Associated Press)

There was almost no change in the Fed statement from the last one. However, the word "substantial" was added to its description of the cooling U.S. housing market.

The Fed continued to say that "some inflation risks remain," even as the pace of economic growth shows signs of weakening.

Many economists expect the Fed to begin lowering its key interest rate at some point in 2007.

"We continue to believe that the Fed will wind up cutting rates in 2007, with a first cut pencilled in for March," said TD Bank economist Eric Lascelles.

"It simply appears that the Fed needs to see more weak data before capitulating."