Fed leaves key rate unchanged

September 16, 2008 11:21:52 AM PDT
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."