US Fed leaves key rates unchanged

The US Federal Reserve has once again retained key interest rates at near-zero levels as part of its continuing efforts to boost the slowing economy.

In yet another indication that recovery is losing steam, the apex bank said that the pace of economic activities as well as employment generation has "slowed down in recent months".

Against such a scenario, the Federal Reserve on Tuesday left benchmark interest rate unchanged.

"The Federal Open Market Committee (FOMC) will maintain the target range for the federal funds rate at 0 to 1/4 per cent and continues to anticipate that economic conditions... are likely to warrant exceptionally low levels for the federal funds rate for an extended period," it said in a statement.

FOMC is the key panel that decides on American monitory policy.

Signalling that more monetary measures could be initiated, the central bank asserted that it is "prepared to provide additional accommodation if needed to support the economic recovery".

According to the Federal Reserve, the economic recovery is likely to be "modest" in the near term. In the 2010 second quarter, the national economy grew just 1.6 per cent.

"Household spending is increasing gradually, but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit," the statement noted.

According to the apex bank, employers are still reluctant to hire more employees. The jobless rate touched 9.6 per cent in August despite government's massive stimulus measures and incentives to businesses to create more employment.