Fed sticks to QE3 guns,economic growth 'moderate'

The Federal Reserve confirmed on Wednesday its commitment to the six-week old QE3 stimulus program, saying that US economic growth remained at a "moderate" pace. The US central bank's policy body kept its benchmark interest rate locked at 0-0.25 percent as expected, and said its highly accommodative monetary policy would stay in place "for a considerable time after the economic recovery strengthens." Brushing off some recent signs of stronger growth, the Federal Open Market Committee said it "remains concerned that, without sufficient policy accommodation, economic growth might not be strong enough to generate sustained improvement in labor market conditions." It noted a rise in household spending and an improving housing industry, but said growth in business investment had slowed, and that the level of joblessness remains high. The FOMC said in a statement that the US economy also remains vulnerable to strains in global financial markets. The Fed said it would continue with its two stimulus programs, QE3 launched last month and the nearly year-old "Operation Twist," through which it invests $85 billion each month in bond purchases in an effort to drive down long-term interest rates to simulate investment and hiring. If the country's high unemployment situation does not improve "substantially", the FOMC said it will continue the existing program, add other asset purchase operations, and employ other monetary tools to boost the economy.