Economic downturn bottoming out, says US Federal Reserve

Signalling that the worst of the economic crisis could well be over, the US Federal Reserve has said that the downturn is bottoming out and financial conditions in the country have improved in recent months.

Signalling that the worst of the economic crisis could well be over, the US Federal Reserve has said that the downturn is bottoming out and financial conditions in the country have improved in recent months.

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The US Fed has also retained its benchmark rates for the Federal funds in the range of zero to 0.25 per cent, as part of its efforts to help in boosting the economy.

After its two-day monetary policy meeting, which ended on Wednesday, the Fed said that "economic activity is leveling out".

"Conditions in financial markets have improved further in recent weeks," it noted in a statement.

The world's largest economy is officially in recession since December 2007 and things turned for the worse after the bankruptcy of financial services major Lehman Brothers in September last year.

The Fed says the low federal funds rates are likely to continue because of the economic conditions.

According to the Fed, economic activity is likely to remain weak for some more time but various actions by the administration including the stimulus would help in "gradual resumption of sustainable economic growth in a context of price stability".

The benchmark rates were slashed to near zero in December last year, to ease the tight credit conditions.