Fed Again Holds Interest Rate at Record Low

The Federal Reserve voted for the 11th straight time Tuesday to keep a key U.S. interest rate at a record low “target range” of zero to 0.25%.

The Fed last held the federal funds interest rate in January; it had first lowered rate to the zero range in December 2008. The federal funds rate is the rate that that banks charge each other.

For the second straight time, Fed governor Thomas Hoenig voted to raise the rate as a lone dissenter.

He said in the Fed’s statement that he believed continuing the lower rate “was no longer warranted because it could lead to the buildup of financial imbalances and increase risks to longer-run macroeconomic and financial stability.”

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