Federal Reserve leaves policies unchanged despite global turmoil

The Federal Reserve opted not to modify its policies despite recent global turmoil, keeping interest rates near zero and sticking with its controversial second round of "quantitative easing," the central bank announced Tuesday.

The Federal Open Markets Committee (FOMC) unanimously approved the policy, noting several challenges facing the economy.

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The Fed said it appears the economic recovery "is on firmer footing" since the FOMC last met in January, and also noted that the nation's labor market appears to be "improving gradually."

However, the central bank noted that commodity prices have increased quickly in recent months, and cited "concerns" about the global supply of crude oil, shaken by Middle East turmoil, driving a "sharp run-up" in oil prices in recent weeks.

But overall, the Fed maintained that inflation expectations in the future remain stable, and that there is only subdued evidence of underlying inflation.

Given those tempered expectations, the FOMC opted not to change its controversial decision to buy back $600 billion of Treasury bonds in a program dubbed "QE2." Critics of the program, including many congressional Republicans, argue the program will lead to long-term inflation. But the Fed maintained, as it has in the past, that it will buy $600 billion of bonds by the end of July, and will adjust the program as needed going forward.

On its historically low interest rates, the Fed indicated no major changes will be forthcoming, repeating past calls that economic conditions "are likely to warrant exceptionally low levels for the federal funds rate for an extended period."