Fed signals plan to keep key rate at record low

WASHINGTON (AP) — The Federal Reserve today signaled that it plans to keep a key interest rate at a record low for a considerable period because a broad range of U.S. economic measures remain subpar.

The Fed said it intends to keep its benchmark rate near zero as long as inflation remains under control, until it sees consistent gains in wage growth, long-term unemployment and other gauges of the job market.

The central bank retained language signaling its plans to keep short-term rates low "for a considerable time" after it ends its monthly bond purchases after its next meeting in October.

"In the Fed's mind, the economy still has work to do, but it's improving," said Mike Arone, an investment strategist with State Street Global Advisors.

Stock prices rose after the Fed issued a statement at 2 p.m. Eastern time after a two-day policy meeting. Traders appeared pleased that the Fed seems in no hurry to raise rates. The yield on the 10-year Treasury note ticked up to 2.59 percent from 2.56 percent before the Fed's statement.