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Fed holds policy steady, less worried on deflation

Published 06/24/2009, 02:22 PM
Updated 06/24/2009, 02:32 PM

WASHINGTON, June 24 (Reuters) - The Federal Reserve on Wednesday held monetary policy steady and said the U.S. economic recession was easing, as it signaled its worries over a possible troubling downward spiral in prices were easing.

Concluding a two-day meeting, the central bank also said it had decided to hold overnight interest rates in a zero to 0.25 percent range -- the level reached in December -- and repeated that they would likely stay unusually low for some time.

With the benchmark interbank lending rate virtually at zero, the Fed has focused on driving down other borrowing costs by buying mortgage-related debt and U.S. government bonds. (Reporting by Alister Bull and Mark Felsenthal; Editing by Tim Ahmann)

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