Fed Leaves Key Interest Rate Unchanged

Washington, DC, Sept. 16, 2008—The Federal Reserve left its main interest rate at 2 percent..

"Downside risks to growth and the upside risk to inflation are both of significant concern,'' the Federal Open Market Committee said in a statement in Washington. "The committee will monitor economic and financial developments carefully and will act as needed to promote sustainable economic growth and price stability.''

Chairman Ben S. Bernanke and his colleagues signaled they will continue to address market turmoil with emergency lending and aim monetary policy at a longer-term economic forecast that may still show the economy skirting a recession. Stocks fell after the decision, while the dollar gained and Treasuries remained higher.

"Tight credit conditions, the ongoing housing contraction, and some slowing in export growth are likely to weigh on economic growth over the next few quarters,'' the statement said. "Over time, the substantial easing of monetary policy combined with ongoing measures to foster market liquidity, should help to promote moderate economic growth.