Fed lets short-term rate stand

Mortgage rates expected to rise

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Deterioration in job markets is abating and economic activity has picked up but is likely to remain weak for a time, the Federal Reserve said in leaving its target for a key short-term interest rate at zero to 0.25 percent.

The housing sector "has shown some signs of improvement over recent months," and household spending "appears to be expanding at a moderate rate," the Federal Reserve Open Market Committee said in announcing its decision to leave the federal funds overnight rate unchanged.