Fed keeps interest rates unchanged

Interest rates will stay at almost zero for the foreseeable future, the Federal Reserve announced Wednesday.

The Federal Open Market Committee (FOMC) said that while economic activity has begun to increase, interest rates would stay between zero and .25 percent for "an extended period" in order to promote economic growth.

"Information received since the Federal Open Market Committee met in August suggests that economic activity has picked up following its severe downturn," the Fed's governors said in a statement.

"The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period," they added.

The decision against increasing rates was not unexpected, but also signals low concerns about the prospect of inflation, a lack of concern reflected in the Fed's announcement today.

The Fed also said that it would buy $1.25 trillion in mortgage-backed securities in order to provide a boost to the housing market, purchases on which they expect to pull back by early 2010.