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WASHINGTON — The Federal Reserve's most aggressive rate-cutting campaign in decades so far has failed to lift the country out of its economic doldrums. The Fed, which started ratcheting down rates last September, halted the campaign in June, citing concerns about rising inflation.

The Fed agreed Tuesday to leave its key rate alone at 2 percent for the second straight meeting. In turn, the prime lending rate for millions of consumers and businesses remained at 5 percent. The prime rate applies to certain credit cards, home-equity lines of credit and other lines.

Q The Fed said Tuesday that its "substantial" rate reductions — a whopping 3.25 percentage points to its key rate since September — along with some other steps it has taken to ease credit problems — should spur "moderate economic growth" over time. Why hasn't that happened already?

A Numerous forces are blunting the bracing impact of the Fed's rate reductions.

People are having trouble getting credit to finance big-ticket purchases. Banks, reeling from the multibillion-dollar losses from soured mortgage investments, have tightened up lending standards.

Moreover, American consumers — even armed with the government's tax rebates of up to $600 a person — have turned more cautious. Falling home values and stock prices have eroded their net worth. On top of all that, high energy and food prices are whittling away at Americans' buying power.

A: By the Fed's forecast, the economy should strengthen next year, growing between 2 percent and 2.8 percent. The economy may gain more speed in 2010, growing as much as 3 percent, which would be considered normal growth. A turnaround in housing prices is an important piece of the puzzle, though.

A: Longer-term 30-year and 15-year mortgages are directly affected by what bond investors on Wall Street think about the direction of inflation and the economy's prospects. These rates have drifted upward this year, reflecting increased concerns from investors about inflation. Rates on 30-year mortgages stood at 6.52 percent last week, up from 6.07 percent at the start of the year.

A: It can take at least six months for a rate reduction to work its way through the economy. Thus, the Fed's last cut — a modest quarter-point reduction in late April — wouldn't be felt until around the fall.

A: Yes. People with short-term adjustable-rate mortgages. These people were faced with big increases when their rates reset from low introductory rates. The Fed's actions gave them some relief.

Rates on many home-equity lines of credit — which are tied to the prime rate — also went down. The average rate on a home-equity line of credit is now 5.5 percent.