Fed Keeps Low Interest Rate; Will Buy $600 Billion in Bonds

The Federal Reserve voted Wednesday to keep a key U.S. interest rate at a record low and said it would buy $600 billion in government bonds over the next eight months in an effort to shore up the economy.

The Fed held the “target range” federal funds rate at a range of zero to 0.25% for a 16th consecutive time. It last held the rate at the low rate in September and first set it in December 2008. The federal funds rate is the rate that banks charge each other.

The bond-buying program, to be done at a rate of $75 billion a month, was seen by analysts as an attempted stimulus to the economy, the Wall Street Journal reported Thursday.

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

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