Fed stays the course on rate policy
Bernanke-led Federal Reserve says economy growing, keeps bond buying program in place
The Federal Reserve signaled it has seen little reason to warrant any change in American economic policy or interest rates.
In a statement, the Fed said it plans on keeping with its policy of keeping the federal funds rate exceptionally low until 2015, and will likewise keep its bond-buying program known as "quantitative easing" in place for the foreseeable future.
The agency's benchmark interest rate currently sits at between 0 and 0.25 per cent, an all-time low.
Under the bond-buying plan, the central bank has pledged to buy roughly $40 billion worth of mortgage-backed securities per month as a way of stimulating the economy by freeing up the banks to lend out more money.
That plan was set in motion last month, and the agency said Wednesday it wants time to assess whether aggressive steps launched in September will boost growth and job creation.
America's central bank said employment growth remains "slow" and the unemployment rate remains "elevated" which echoed the agency's statements on those topics the last time they announced their policy rationale.
Consumer spending strengthens
It noted that consumer spending has strengthened slightly and that housing has shown further signs of improvement.
Growth in business investment has slowed, though. The Fed said inflation has recently risen slightly because of higher energy prices. But it said inflation over the long run should remain mild.
The Fed's statement was largely expected, and it didn't move stock or bond prices.
"After the big changes in September and the presidential election less than two weeks away, officials were probably happy to make this week's meeting as much of a non-event for markets as possible," said Jim O'Sullivan, chief U.S. economist for High Frequency Economics.
Federal Reserve chairman Ben Bernanke and nine other fed members voted in favour of the action. The lone dissenter was Jeffrey M. Lacker, who was opposed to the agency making any more bond purchases and disagreed with "the time period over which … exceptionally low levels for the federal funds rate [is] likely to be warranted."
With files from The Associated Press