Reuters Fed renews vow to keep rates low

(Reuters) - The Federal Reserve renewed its pledge on Tuesday to keep interest rates near zero for an "extended period" even as it sounded more upbeat about jobs.

The central bank's nod to a firmer job market after the deepest recession in decades offered a hint it may be moving closer to dropping its promise to hold borrowing costs at rock bottom levels.

However, it reintroduced a note of caution about the housing sector and repeated its view the economy's recovery would likely be moderate for a time. It also said inflation was likely to remain subdued as it held interbank overnight rates in a zero to 0.25 percent range.

The decision left most economists betting on a Fed rate hike by year end.

"The (Fed's policy) committee ... continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period," the central bank said in a statement. more...