[BRIEFING.COM] The Fed took a neutral tone in its latest directive, noting that there are both risks to inflation and growth.  The Fed noted that although the economy grew in the second quarter, labor markets have "softened further" and financial markets remain under "considerable stress."

The statement was very similar to the June 25 release when the Fed also kept rates unchanged.  One notable difference is in June the Fed said "upside risks to inflation and inflation expectations have increased," while the current statement says "upside risks to inflation are also of significant concern to the committee."

The FOMC believes that inflation will moderate later this year and in 2009.

The stock market traded in choppy manner following the release, and is currently trading modestly higher than pre-FOMC levels.