August 12, 2009

Fed keeps lending rates unchanged

The U.S. Federal Reserve's Open Market Committee said Wednesday economic conditions have stabilized, but it would keep its bank-to-bank lending rates intact.

The Fed said data received since the committee meeting in June suggest that economic activity is leveling out, pointing to stabilized household spending that remains constrained by ongoing job losses, sluggish income growth, lower housing wealth and tight credit.

The Fed said the economy was likely to remain weak for a time, although it anticipates firmer footing for financial markets.

Government interventions, including the $787 billion economic stimulus package, will contribute to gradual resumption of sustainable economic growth in a context of price stability, the Fed said.

The Fed said it anticipates keeping lending rates between zero and 0.25 percent for an extended period.