Fed Again Pledges To Hold Rates At Record-lows

JEANNINE AVERSA

WASHINGTON (AP) — The Federal Reserve pledged Wednesday to keep a key interest rate at a record low for an "extended period," signaling that the weak economy remains dependent on government help to grow.

The Fed said economic activity has "continued to pick up" and that the housing market has strengthened — a key ingredient for a sustained recovery.

But Fed Chairman Ben Bernanke and his colleagues warned that rising joblessness and tight credit for many people and companies could restrain the rebound in the months ahead.

"Economic activity is likely to remain weak for a time," they said.

Against that backdrop, the Fed kept the target range for its bank lending rate at zero to 0.25 percent. And it made no major changes to a program to help drive down mortgage rates.

Commercial banks' prime lending rate, used to peg rates on home equity loans, certain credit cards and other consumer loans, will remain about 3.25 percent, the lowest in decades.