WASHINGTON, DC — Noting that "economic activity is beginning to firm," the Federal Reserve decided this week to keep its target interest rate unchanged at 1-3/4%.

"Signs that weakness in demand is abating" are more prevalent, the Federal Open Market Committee stated. "With the forces restraining the economy starting to diminish, and with the long-term prospects for productivity growth remaining favorable … the outlook for economic recovery has become more promising."

The committee cautioned, "The degree of any strength in business capital and household spending, however, is still uncertain."

Publication date: 01/28/2002