NEW YORK (CNNMoney.com) - The Federal Reserve said Wednesday it appears that the U.S. economy has halted the longest period of decline since the Great Depression, although it cautioned that economic activity is likely to remain weak in the near term.
The central bank left its key overnight interest rate at 0% to 0.25% range, as expected. Its statement at the conclusion of its two-day meeting said "economic activity is leveling out." That is its most bullish assessment of the economy in more than a year, and suggests that a recovery may have started.
It said that it still expects "inflation will remain subdued for some time" and said that it expects rates to remain near zero percent "for an extended period."
The Fed cut interest rates to the record low range at its December meeting in an effort to spur the struggling U.S. economy at that time.
It also pumped about $1 trillion of cash into the economy during the last year through a number of extraordinary programs, including the purchase of Treasurys and mortgage-backed securities, as well as new programs to get banks and other lenders to extend credit to consumers.
But in recent weeks there has been a growing consensus among top economists that the U.S. economy has turned around or is close to doing so. A number of economic readings, including the government's employment report and the gross domestic product, the broadest measure of the nation's economic activity, have improved - although they still show job losses and a modest drop in GDP.