After promising to keep a key short-term interest rate near zero at least through the middle of 2013, the Federal Reserve is trying to lower long-term rates, already at record lows. That will keep a lid on borrowing costs for a while, but it won't do much to help the economy.

Commercial banks will keep their prime lending rate at 3.25% into 2013. The 10-year Treasury note, a benchmark for mortgage rates and corporate bonds, should remain near its current rate of 2% until growth picks up, which won’t be sooner than mid-2012.

The Fed’s method of lowering long-term rates is a plan to sell $400 billion worth of short-term debt and buy Treasury notes and bonds with maturities of six to 30 years.

In setting such a target, the Fed is hoping that more consumers will refinance or buy houses, thereby increasing growth of the economy. But the problem hasn’t been lack of applicants. Real estate agents report deals falling through because appraisals come in below the sales price. Other deals fall through because would-be buyers can’t sell their existing homes. Meanwhile, most businesses have cash -- corporations have accumulated a record $2 trillion. Lower rates at this time won’t induce them to buy new equipment or hire more workers.

Growth remains sluggish, but it has picked up a bit in the second half of 2011. The Fed pegged its rate for overnight loans at near zero in December 2008 and launched a huge purchase of Treasury debt in 2009 and 2010. With all that, gross domestic product grew at an annual rate of only 0.9% in the first half of 2011 and will grow at a rate a bit over 2% in the second half.

Some Fed watchers see a hidden purpose in the Fed’s latest action: to let inflation creep toward 4% or 5% a year (consumer prices are up 3.8% over the past 12 months), hoping that it stimulates buying and investing and, ultimately, hiring. Fed officials wouldn’t come out and admit this because a central banker’s greatest worry is runaway inflation. In the past, Fed Chairman Ben Bernanke has said that 2% a year is the maximum that should be tolerated. But the Fed is willing to put inflation-fighting on the back burner if it can lower the unemployment rate, which is unacceptably high at 9.1%.

At its meeting Nov. 1 and 2, the Fed’s rate-setting Federal Open Market Committee made no change to its long-term commitment to low rates, and gave no indication that any policy change was likely anytime soon. Attention will focus on what else the Fed might do if unemployment remains high and growth, tepid.

The Fed could buy more bonds outright and add debt to its balance sheet, instead of trading short-term bonds for an equal amount of long-term debt -- the more conservative approach so far. But several members of the FOMC would resist another round of bond purchases out of fear that it would sow the seeds of inflation. Other alternatives are few and mostly untried -- charging banks interest for parking their money at the Fed, for example, or even negative interest rates for overnight loans. These too, would meet substantial opposition by some Fed board members.