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1/29/2004

Fed keeps rate low

The Associated Press

WASHINGTON — The Federal Reserve, not wanting to upset the economic recovery, held a main short-term interest rate at a 45-year low Wednesday.
Wrapping up a two-day meeting — the first regularly scheduled session of the year — Fed Chairman Alan Greenspan and his colleagues left the federal funds rate unchanged at 1 percent. The funds rate, the interest that banks charge each other on overnight loans, is the Fed’s primary tool for influencing the economy. The Fed lowered the funds rate to its current 1 percent level in June, and the rate hasn’t budged since then.
However, the Fed used some new language in its statement Wednesday, saying “with inflation quite low ... the committee believes that it can be patient in removing its policy accommodation.”
The Fed said that since its last meeting, economic reports suggest that the economy is “expanding briskly.”