Federal Reserve holds rates

The US Federal Reserve has held interest rates, claiming that the country is on course to recover from recession.

Yesterday saw the American central bank's Federal Open Market Committee deciding to hold the rate at a range between zero and 0.25 per cent.

The statement by the body commented that the downturn is showing signs of weakening, although factors such as unemployment and restricted credit will ensure the recovery is slow, albeit helped by the stimulus package.

In this context, the body said, it "expects that inflation will remain subdued for some time", enabling it to hold rates.

Such a comment may suggest that the very low base rate will remain in place for a lengthy period, which could encourage those looking to take out mortgages to buy a property in the US, while economic recovery may help the market to start growing again.

Earlier this month the American Bankers Association's Economic Advisory Committee predicted that there will be economic growth of 0.5 per cent between July and September this year.

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