Federal Interest Rates

By: Associated Press

Updated: Tue 3:36 PM, Oct 28, 2003

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The Federal Reserve has surprised virtually no one by deciding to keep its benchmark short-term interest rate at a 45-year low. But observers are keying on the central bank's statement that the risk of deflation, or falling prices, is likely to persist for the "foreseeable future."

The federal funds rate stays at one percent. It's the rate banks charge each other on overnight loans, the Fed's primary tool for influencing the economy.

Members of the policy-making Federal Open Market Committee say low short-term rates "can be maintained for a considerable period."

Taking a somewhat more upbeat tone from the last Fed meeting over a month ago, the central bankers said, "The labor market appears to be stabilizing."

That contrasts with a weakening labor market noted in September.

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