August 12, 2026

Interest rates unchanged

WASHINGTON -- Americans could see interest rates stay low or even drop further in the weeks ahead, depending on how the wobbly economy holds during a war with Iraq.

Federal Reserve Chairman Alan Greenspan and his Federal Open Market Committee colleagues decided Tuesday to hold a key interest rate at 1.25 percent, a 41-year low, saying they would keep a close eye on economic developments surrounding the war.

"In the current circumstances, heightened surveillance is particularly informative," Fed policy-makers said.

Economists said that language raises the possibility of a rate cut in the future should the economy take a turn for the worse.

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