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Federal Reserve ponders measures Fed keeps interest rates on hold
(about 22 hours later)
The US Federal Reserve is to consider whether fresh moves are needed to deal with the economic impact of swine flu. The US Federal Reserve has kept interest rates on hold at its current range of between zero and 0.25%.
The outbreak has weighed down global markets, with shares in airlines and travel companies seeing big losses. It also said it would continue its present level of purchasing long-term government debt to expand money supply, which it announced last month.
The Fed is starting its two-day meeting on interest rate policy, and is widely expected to keep rates on hold at its current range of zero to 0.25%. Earlier this month both President Barack Obama and Fed chairman Ben Bernanke said the recession was easing.
Last month the US central bank said it would buy government debt to expand money supply. Meanwhile, official data showed GDP fell 6.1% in the first three months of 2009, led by a sharp fall in exports.
It said it would pump almost $1.2 trillion (£843bn) into the economy to boost lending and promote economic recovery - a policy known as quantitative easing.
Two weeks ago the Fed said in its Beige Book that US economic activity had weakened in March, but was also showing some signs of stabilisation. The report is used to set interest rates.
Most analysts expect April's meeting to be used to examine the effectiveness of policies already in place.
"This is a good chance for Fed policy makers to pause and take stock of what they've done so far and allow programs to do their thing," said Michael Feroli, economist at JP Morgan Economics.
However John Spinello, senior vice-president at Jefferies & Co in New York, said the meeting could play into market psychology "as some may speculate that some additional quantitative easing may be announced".