US Federal Reserve pledges to keep rates low

By DAILY MAIL REPORTER
Updated: 06:16 EST, 29 April 2010

The US Federal Reserve vowed to hold rates 'exceptionally' low for a prolonged period of time despite signs of an improvement in the world's biggest economy.

A summary of the latest rate-setting meeting said that economic activity in the US has 'continued to strengthen' and that the jobs market is starting to improve.

However, it warned that low income growth and tight credit are likely to weigh on the economy, and that the pace of economic recovery is likely to be 'moderate'.

Road to recovery: US Federal chairman Ben Bernanke has identified signs of economic improvement

As such, inflation will remain 'subdued' for some time, underpinning a decision to keep US interest rates at a record low of 0 per cent to 0.25 per cent. 

However, one member of the committee, Thomas M. Hoenig, dissented for the second time, arguing that the Fed's pledge to keep rates low for 'an extended period' was now misguided.