The Federal Reserve (Fed) this week is widely expected to maintain its drive to keep borrowing costs at record lows indefinitely, prompted by a combination of weak inflationary pressure and modest U.S. economic growth. The Fed's policy-setting committee will start a two-day meeting Tuesday and will issue a policy statement after its meeting concludes Wednesday afternoon. The U.S. central bank has said it plans to keep its key short-term interest rate near zero percent at least until the unemployment rate falls below 6.5 percent from its current 7.6 percent. It also has been purchasing $85 billion a month in treasuries and mortgage bonds to try to keep long-term borrowing rates down. In recent months, many economists have suggested that the Fed might reduce its bond purchases in the second half of 2013 if job growth accelerated. But the March job-creation report was surprisingly weak, and inflation has been running below the Fed's target rate, allowing it to continue stimulating the economy without igniting price increases.
