US Central Bank To Hold Interest Rates Low

Posted August 9th, 2011 at 3:40 pm (UTC-5)
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Top officials of the U.S. central bank say they are worried that the economy is recovering more slowly and the labor market is weaker than they expected.

Tuesday, in a bid to boost the faltering U.S. economy, they voted to keep the key interest rate in its current ultra-low range until at least the middle of 2013. That rate was cut to between zero and one-quarter of a percent in December of 2008. Officials hope these record-low interest rates lead to more borrowing and spending to stimulate the economy.

The Fed meeting followed several days of steep losses in stock markets around the world and Friday's downgrade of U.S. credit by the Standard & Poor's rating agency. Right after Tuesday's Fed announcement, U.S. stock prices fell, bounced back, and continued with very volatile trading.

Central bank officials said they discussed other policy options to boost the economy, and are ready to use them if needed.

U.S. President Barack Obama has called Treasury Secretary Tim Geithner to a meeting at the White House later Tuesday.