US Federal Reserve holds interest rates steady, says economy remains on track

The US Federal Reserve held interest rates steady on Thursday and said ongoing strong job gains and household spending had kept the economy on track.

"The labor market has continued to strengthen and ... economic activity has been rising at a strong rate," the Fed said in its latest policy statement, leaving intact its plans to continue raising rates gradually.The statement reflected little change in the U.S. central bank's outlook for the economy since the last policy meeting in September, with inflation remaining near its 2 percent target, unemployment falling and risks to the economic outlook appearing to be "roughly balanced."

Policymakers, however, noted that business investment had "moderated from its rapid pace earlier in the year," a possible drag on future economic growth.Financial markets had expected the Fed to hold its benchmark overnight lending rate steady in the current range of 2.00 percent to 2.25 percent.

"The only surprise here is that they weren't more hawkish," said Boris Schlossberg, managing director of foreign exchange strategy at BK Asset Management in New York. "There were a couple words that were more muted – that business investment had 'moderated' from its earlier pace. But apart from that they have not signaled any warning signs at all."The dollar weakened modestly against the euro and Japanese yen, but other financial markets were little changed from levels ahead of the Fed's statement. Stocks remained mixed after Wednesday's substantial rally following the results of the U.S. midterm elections, in which Democrats captured control of the U.S. House of Representatives but Republicans held the Senate.