Fed holds US rates steady, cites balanced risks

The Federal Reserve kept US interest rates steady at four-decade lows as expected today, saving its ammunition for 2003 as it…

The Federal Reserve kept US interest rates steady at four-decade lows as expected today, saving its ammunition for 2003 as it waits to see whether the economy can weather the recent "soft spot."

The unanimous decision by the US central bank's Federal Open Market Committee leaves the trend-setting federal funds rate at 1.25 per cent, the level it hit after the Fed cut borrowing costs by a bold half percentage point in November.

Fed policymakers also maintained their characterisation of the risks faced by the economy as being evenly balanced between rising prices and a renewed downturn.

That was the position policymakers adopted last month when they cut rates and it was seen as a signal of steady rates for some time ahead.