Facing concerns about the amount of financial stimulus needed to keep the economy from speeding up too quickly, the Federal Reserve on Wednesday said inflation will remain subdued for some time, keeping its key interest rate unchanged and said it would modify its program to buy mortgage-backed securities “as warranted.”

While the prices of energy and other commodities have risen lately, inflation will remain subdued for some time, the Federal Reserve’s policy setting committee said on Wednesday at the conclusion of a two day meeting.

The Federal Open Market Committee also said it would keep its target range for the federal funds rate at 0 to ¼ percent, saying it anticipates economic conditions are likely to warrant an exceptionally low rate for an extended period.

The Fed also kept in place its previous policy to buy up to $1.25 trillion of agency mortgage-backed securities and up to $200 billion of agency debt by the end of the year. It will also buy up to $300 billion of Treasury securities by autumn.

“The Committee will continue to evaluate the timing and overall amounts of its purchases of securities in light of the evolving economic outlook and conditions in financial markets,” it said in a released statement.

The Fed said it is monitoring its balance sheet and will adjust its credit and liquidity programs “as warranted.”

The Fed noted that the pace of economic contraction is slowing, adding that financial markets have generally improved in recent months.

It said economic activity is likely to remain weak for a time, but said various Fed, governmental and market forces would “contribute to gradual resumption of sustainable economic growth in a context of price stability.”

Energy Inflation