Business News - Fed keeps lending rates low

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Fed keeps lending rates low

WASHINGTON (UPI) -- The U.S. Federal Reserve said it would maintain its current low interest rates at zero to 0.25 percent, despite recent economic improvements.

The Open Market Committee said in a statement that, "economic activity is likely to remain weak for a time," suggesting it would continue to keep rates low for "an extended period."

The committee pointed to improvements, but kept its tone less than exuberant.

The housing market "appears to be expanding," the Fed said, "but remains constrained by ongoing job losses, sluggish income growth, lower housing wealth, and tight credit."

The central bank will continue with its program of buying $1.25 trillion of mortgage-backed securities and about $175 billion of agency debt, a diminished amount compared to an early plan of buying $200 billion.

The committee forecast "inflation will remain subdued for some time."'

Copyright 2009 by United Press International

This news arrived on: 11/04/2009

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