Some traders have increased bets that policy makers will cut the target rate.
Instead of rising with the target rate, mortgage rates have declined.
The effective Fed funds rate had been trading below the target rate of 1percentt long before Tuesday's announcement.
Money market rates have sunk close to 1.25percentthetargetrate rate of the Federal Reserve for overnight lending among banks.
Central bankers cut the target rate on overnight loans between banks to a seven-year low of 3percentt last week.
On Monday, the Fed cut the target rate on overnight loans among banks to 3percentt from 3.5percentthetheighthtimeite it has reduced rates this year.
This week, the Federal Open Market Committee cut the target rate for overnight loans between banks to 4.75percentthethe first reduction since 2003.
Here's the official line from the Treasury: "The latest figures show that inflation remains below the target rate and well below half of the peak in September 2011.
But it was a huge mistake to have believed that 6, not 4percentt unemployment (or less) was the target rate.
The governor of the Reserve Bank of Australia, Ian Macfarlane, and his eight board colleagues left the target rate for overnight loans between banks at 4.75percentt.
That pushed the target rate for the federal funds rate, the interest that banks charge one another, down to 1percentt, matching a low recorded only once before in the last half-century.
