US Fed sees 'easing' of recession

The Fed left rates unchanged

The Federal Reserve has said the recession in the US is "slowing" but the economy is likely to remain weak.

The central bank kept interest rates unchanged and said they would remain at its current low range of between zero and 0.25% for an "extended period".

The Fed also said it would continue its present level of purchasing long-term government debt to expand money supply.

It expects inflation to stay "subdued for some time" even though energy and commodity prices have risen recently.

"Information received since the Federal Open Market Committee (FOMC) met in April suggests that the pace of economic contraction is slowing," the Fed said in a statement after concluding a two-day meeting.

The FOMC voted unanimously to maintain its base rate, as had widely been expected.

In March, the central bank announced a $1.2 trillion programme of buying government debt to boost lending and promote economic recovery - a policy known as quantitative easing.

The Fed added that it would continue to "evaluate the timing and overall amounts of its purchases of securities in light of the evolving economic outlook and conditions in financial markets".

Analysts were unsurprised by the outcome of the FOMC's latest meeting.

"It's exactly what the markets expected. The Fed is pointing out that the recovery is tenuous," said Jim Awad from Zephyr Management in New York.