Satisfied Fed holds rate steady

WASHINGTON -- The Federal Reserve held interest rates steady yet again, noting the economy had slowed but saying growth would probably pick up in the months ahead.

With elections looming, Fed policymakers, wrapping up a two-day meeting yesterday , delivered a largely balanced message about economic conditions.

Fed chairman Ben Bernanke and all but one of his central bank colleagues felt comfortable staying the course and kept an important interest rate at 5.25 percent for the third meeting in a row.

That meant commercial banks' prime interest rate remained at 8.25 percent.

The Fed's goal is for the economy to slow enough to reduce pressures from inflation but not so much that it would risk falling into recession.

In fresh evidence of the housing cooldown, the National Association of Realtors reported yesterday that sales of previously owned homes fell 1.9 percent in September. The median sales price of a single-family home, meanwhile, slid to $219,800 last month, a 2.5 percent drop from a year ago. That marked the biggest annual decline on record.

Analysts, however, are hoping for a bit of a rebound in overall economic activity in the October-to-December period.