Fed Holds Interest Rates Steady at Low Level

Top officials of the U.S. central bank voted Wednesday to keep interest rates at the ultra-low level where they have been for nearly a year.

The Federal Reserve said the job market was continuing to improve and that household spending was rising, but that business investment was soft and the rate of inflation remained below target.

In a written statement, the Fed said the case for raising interest rates was continuing to strengthen, but that officials wanted further evidence before boosting rates.

The rate of inflation increased «somewhat,» but remains below the 2 percent level experts say is best for the economy. Central banks typically raise interest rates to keep inflation under control.

The U.S. central bank slashed the federal funds rate — the rate banks charge to each other on overnight loans — to record lows during the recession in a bid to boost growth. Last December, the Fed raised the rate slightly, to a range between .25 percent and .5 percent, but that left the figure still at an unusually low level.

The Fed next meets in December, and many investors and economists expect the central bank to raise rates, slightly, at that time. Bankrate.com analyst Mark Hamrick says the Fed was probably reluctant to raise rates until the economic uncertainty from the U.S. election is past.

U.S. economic growth rose to a 2.9 percent annual rate between July and September, and unemployment has fallen from 10 percent at the worst of the recession to 5 percent today.