Fed Stands Pat, Stocks Fluctuate

The central bank acknowledges the strains in financial markets but declines to cut interest rates

By the Associated Press

The Federal Reserve says strains in financial markets have "increased significantly" but it kept a key interest rate unchanged. The central bank said Tuesday it was keeping its target for the federal funds rate, the interest that banks charge on overnight loans, unchanged at 2 percent.

In a statement, the Fed said "strains in financial markets have increased significantly and labor markets have weakened further."

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