The US Federal Reserve this evening maintained its near-zero interest rate policy and maintained its view that exceptionally low rates are likely to remain in effect 'for an extended period'.
The Fed, concluding a two-day policy meeting, maintained the federal funds base rate of a range of zero to 0.25%, which has been in place for the past year.
The Federal Open Market Committee, headed by chairman Ben Bernanke, did acknowledge some improvement in economic conditions, notably in the troubled labour market, but indicated this was not enough to shift away from a massive stimulus effort.
The panel said that recent data 'suggests that economic activity has continued to pick up and that the deterioration in the labour market is abating,'. It also noted that the housing sector 'has shown some signs of improvement over recent months.'
But the FOMC said that it sees 'substantial resource slack likely to continue to dampen cost pressures' and predicted that 'inflation will remain subdued for some time.'
These conditions 'are likely to warrant exceptionally low levels of the federal funds rate for an extended period,' the FOMC statement said.
Meanwhile, US President Barack Obama has confidence in Chairman Ben Bernanke's leadership at the Federal Reserve, the White House said tonight.
White House spokesman Robert Gibbs said that Bernanke, who faces a Senate Banking Committee vote tomorrow on his nomination for a second term, was part of an economic team that had helped bring the US economy back from the brink.
Read more about Ben Bernanke being named as Time Person of the Year here.
