The Federal Reserve says the recession is easing, but that the economy likely will remain weak and keep a lid on inflation. Against this backdrop, the Fed held a key bank lending rate at a record low of between 0% and 0.25%, and pledged again to keep it there for "an extended period" to help brace activity going forward.
Even though energy and other commodity prices have risen recently, the Fed said inflation will remain "subdued for some time." This new language sought to ease Wall Street's concerns the Fed's aggressive actions to revive the economy will spur inflation later on. The Fed also decided to stay the course on existing programs intended to drive down rates on mortgages and other consumer debt.