Fed Again Holds Interest Rate at Record Low

For the 13th straight time, the Federal Reserve voted Wednesday 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 late April. 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.

The Fed indicated that Europe’s debt crisis poses a risk to the U.S. economy and pledged to hold rates at record lows to make sure the recovery stays on track, the Associated Press reported.

The Fed said it “anticipates a gradual return to higher levels of resource utilization in a context of price stability, although the pace of economic recovery is likely to be moderate for a time.”

Fed governor Thomas Hoenig voted for a fourth straight time to raise the rate, the Federal Open Market Committee’s lone dissenter.

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