Fed Holds Interest Rate at Record Low

The Federal Reserve voted Tuesday to keep a key U.S. interest rate at a record low “target range” of zero to 0.25%, while signaling it may take more steps to help the sluggish economy.

The move was the 15th consecutive time the Fed held the rate in place. It last held it in mid-August, and first set it in December 2008. The federal funds rate is the rate that banks charge each other.

Noting some indicators were improving while citing lagging employment, housing and other indicators, the Fed said it will “continue to monitor the economic outlook and financial developments and is prepared to provide additional accommodation if needed to support the economic recovery and to return inflation, over time, to levels consistent with its mandate.”

As in its recent rate decisions, Fed governor Thomas Hoenig was the Federal Open Market Committee’s lone dissenter.

Click here for the Fed’s full statement. (Federal Reserve Web site.)