Fed’s decision not to cut key rate signals its outlook

The Federal Reserve, noting encouraging signs that the economy is working through a “soft spot,” left interest rates unchanged last week and signaled that November’s rate cut may turn out to be the last one needed for recovery.

The Fed decision to leave its benchmark rate for overnight bank loans at a 41-year low of 1.25% means that Americans will be able to keep borrowing at the lowest interest rates in decades on home-equity loans.

The Fed, which aggressively cut rates 11 times in 2001 as it struggled to deal with the country’s first recession in a decade and the economic fallout from the terrorist attacks, had left its fund rate unchanged through most of this year until the half-point cut Nov. 6.