Fed keeps lid on short-term rates

Mortgage purchases to conclude by end of March

The Federal Reserve will keep its target rate for the federal funds overnight rate at zero to 0.25 percent, and continues to expect that economic conditions are likely to warrant "exceptionally low levels of the federal funds rate for an extended period."

The Federal Open Market Committee, in announcing the decision to keep the key short-term rate unchanged, said activity in the housing sector has increased over recent months. While household spending appears to be expanding, it remains constrained by ongoing job losses, sluggish income growth, lower housing wealth, and tight credit.