Fed, as expected, leaves rates intact

Decision makers of the Open Market Committee said "economic activity has continued to strengthen." The labor market, however, was characterized as "stabilizing."

The bank-to-bank interest rate is zero to 0.25 percent.

With unemployment high (9.7 percent), "household spending is expanding at a moderate rate," the Fed said.

"Modest income growth, lower housing wealth and tight credit," round out the pressures on consumer spending, keeping the recovery at a slow pace, the Fed said.

Bank lending "continues to contract," the Fed said.

On the positive side, business spending on equipment and software "has risen significantly," the Fed said in a statement.

The central bank's $1.25 trillion plan to purchase mortgage-backed securities will be completed at the end of the month, a step that some predict will cause mortgage interest rates to rise. The Fed said it would "continue to monitor the economic outlook ... and will employ its policy tools as necessary to promote economic recovery and price stability."

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