Federal Reserve leaves key interest rate target unchanged

The U.S. Federal Reserve did what many expected on Wednesday as it left its key interest rate range unchanged.

The central bank maintained its overnight lending rate for banks at a target range of between 0.25 and 0.50 per cent -- where it has been since it was boosted from near zero back in December.

• U.S. employment rebounds in March, gaining 215,000 jobs
• Federal Reserve still planning to hike rates slowly, Yellen says

Without giving a hint of when it will next raise rates, the Fed saidthe overnight lending rate"rate is likely to remain, for some time, below levels that are expected to prevail in the longer run."

The Fed said labourmarket conditions have improved further since its interest rate decision in March, "even as growth in economic activity appears to have slowed."

The statement that accompanied Wednesday's announcement dropped the reference the Fed made back in March cautioning thatglobal developments "poserisks." The Fed said today itwould "closely monitor" global economic
and financial developments.

Federal Reserve Chair Janet Yellen was among nine members of the Fed's Open Market Committee who voted to keep interest rates unchanged. One membervoted in favour of boosting thetarget range for the federal funds rate to 0.5to 0.75percent.

Wednesday's interest rate announcement came a day before the U.S. government is expected to release figures that show the economy grew at an annual rate of less than one per cent during the first three months of this year.

"Our house view remains tentatively in favour of a hike at the June [interest rate decision]," ScotiabankEconomics vice-president Derek Holt said in a commentary.

"TheJune meeting remains 'live', but less so than before," said BMO Capital Market deputy chief economist Michael Gregory.