The Federal Reserve, the U.S. central bank, kept its benchmark federal funds rate unchanged at 0 to 0.25 percent and repeated that it anticipates keeping rates at these "exceptionally low levels" at least through mid-2015, steps that were widely expected by financial markets.
A statement by the Federal Reserve's policy making body, the Federal Open Market Committee (FOMC), essentially mirrored its statement from September. The FOMC said it remains concerned that without sufficient policy accommodation, economic growth might not be strong enough to generate a sustained improvement in the labor market.
The FOMC said it would continue to increase its holdings of longer-term securities by about $85 billion each month through the end of this year by buying $40 billion of mortgage-backed securities a month, reinvesting proceeds from holdings into more agency-backed mortgage securities and extending the maturity of Treasury securities.
As last month, the only member of the FOMC to vote against the statement was Jeffrey Lacker, president of the Federal Reserve Bank of Richmond.
The FOMC also repeated that it would continue to buy mortgage-backed securities, other assets, and "employ its other policy tools" until the situation in the labor market improves "substantially."
The U.S. unemployment rate fell to 7.8 percent in September, continuing its falling trend, and the first time it fell below 8.0 percent this year.
Inflation picked up to an annual rate of 2.0 percent in September, up from 1.7 percent in August, mainly due to higher food and energy prices, but the FOMC said longer-term inflation expectations remained stable.
The Federal Reserve targets inflation of 2.0 percent and its federal funds rate has been unchanged since December 2008. The Fed's mandate is to foster maximum employment and price stability.
The FOMC said economic activity had "continued to expand at a moderate pace" in recent months and the unemployment rate remained elevated.
The U.S. economy expanded by an annual 1.3 percent in the second quarter, down from 2.0 percent in the first quarter and 3.0 percent in the fourth quarter.
Last month the Federal Reserve undertook its third round of asset purchasing, known as Quantitative Easing 3, with its plan to purchase mortgage-backed securities. It has already purchased some $2.3 trillion in U.S. government and housing-related debt in an effort to keep interest rates low and support the mortgage market and overall economy through accommodative financial conditions.