The Federal Reserve has maintained a commitment to keep interest rates near zero for a “considerable time” after asset purchases are completed, saying the US economy is expanding at a moderate pace and inflation is below its goal.

“Labour market conditions improved somewhat further” while “significant underutilisation of labour resources” remains, the Federal Open Market Committee said today in a statement in Washington.

“Inflation has been running below the committee’s longer-run objective.”

In July, the Fed said inflation was “somewhat closer” to its goal.

Policy makers tapered monthly bond buying to $15 billion in their seventh consecutive $10 billion cut, staying on course to end the programme in October.

Bond purchases intended to hold down long-term interest rates have swelled the Fed's balance sheet to $4.42 trillion. -

Bloomberg