The US Federal Reserve held its key interest rate at historic lows on Wednesday and said the economy was continuing its modest recovery despite financial headwinds from abroad.
The Federal Open Market Committee said it was maintaining its federal funds rate target between zero and 0.25 per cent, where it has been pegged since December 2008 to help the economy recover from its worst recession in decades.
“The pace of economic recovery is likely to be moderate for a time,” said the panel headed by Fed Chairman Ben Bernanke.
But the Fed statement suggested that Europe’s fiscal problems were taking a toll.
“Financial conditions have become less supportive of economic growth on balance, largely reflecting developments abroad,” the committee said, likely referring to the eurozone sovereign crisis.