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The Federal Reserve left its key interest rate at essentially zero per cent, to no one's surprise, but its accompanying statement gave some signals that economic conditions in the United States are improving modestly.

The Fed said that household spending "has shown further signs of stabilizing but remains constrained by ongoing job losses, lower housing wealth, and tight credit."

At the same time, "Businesses are cutting back on fixed investment and staffing but appear to be making progress in bringing inventory stocks into better alignment with sales" - an improvement over the previous statement in May, when the Fed failed to mention anything about progress.

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It expects inflation will remain stable, despite rising commodity prices: "The prices of energy and other commodities have risen of late. However, substantial resource slack is likely to dampen cost pressures, and the Committee expects that inflation will remain subdued for some time."

Most other aspects of the statement were similar to the May statement, but we'll get the experts' view ASAP.

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About the Author
Investing Reporter

David Berman has been writing about business and investing since 1995. He has written for a number of magazines, including Canadian Business and MoneySense. He worked at the Financial Post as an investing writer and daily columnist before moving to the Globe and Mail in 2008. More

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