Fed renews commitment to QE2

The Federal Reserve has renewed its commitment to its $600bn asset purchase scheme, and has kept rates on hold, but upgraded its view of the US economy.

The Fed's rate-setting Open Market Committee (FOMC) says consumer spending is increasing at a moderate pace, although it remains constricted high unemployment, modest income growth, lower housing wealth, and tight credit. Meanwhile business spending on equipment and software is rising, though less rapidly than earlier in the year, while employers are reluctant to hire and the housing market remains weak. "Longer-term inflation expectations have remained stable, but measures of underlying inflation have continued to trend downward," the FOMC says. Only one committee member, Thomas M...