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Fed not budging on short-term rates

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A Federal Reserve committee that determines monetary policy is keeping its target for a key short-term interest rate at zero to 0.25 percent, saying economic conditions will likely warrant keeping it at "exceptionally low levels ... for some time."The Fed last month completed a series of 10 consecutive reductions to the federal funds rate, the rate banks charge each other for overnight loans. Before the cuts began in September 2007, the federal funds rate stood at 5.25 percent.Some worry that the drastic reduction in the Federal Funds rate will spur inflation or runaway growth -- similar cuts after the dot-com bust have been blamed for the housing boom. But in a statement, the Federal Open Market Committee today said that with the economy continuing to weaken, inflationary pressure is expected to "remain subdued" in coming quarters.The committee anticipates "a gradual recovery in economic activity" later this year, but called the downside risks to that out...