Fed holds rates steady in face of turbulence
|
|
|
| Posted
:
Tue, 16 Sep 2008 18:17:12 GMT |
| Author
:
Reuters |
| Category
:
US (Business) |
| News Alerts by
Email ( click
here ) |
|
US Business News |
Home
|
|
|
|
WASHINGTON (Reuters) - The Federal Reserve held its key benchmark U.S. interest rate steady on Tuesday, opting for the time being to soothe rattled financial markets with central bank lending facilities rather than rate cuts.The U.S. central bank's decision leaves the interbank overnight federal funds rate at 2 percent, where it has been since April.Until recently, financial markets had expected the Fed to hold fire. However, interest rate futures markets had shifted to price in a quarter-point rate reduction in the wake of the bankruptcy of 158-year-old Lehman Brothers Holdings Inc , the sale of investment bank Merrill Lynch to Bank of America , and a scramble for cash by insurer American International Group Inc .The swift-moving events have rattled global financial markets and threaten to exacerbate a credit crunch that has already helped push the U.S. economy toward recession.On Sunday, the Fed said it would accept a wider range of collateral, including equities, from investment banks seeking central bank loans in an effort to help keep markets functioning.(Reporting by Mark Felsenthal and David Lawder) (c) Reuters 2008. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world.
|
|
|
|
|
|
|
|
|