Fed Maintains QE3 Policy, Vows To Keep Rates Near Zero Until Mid-2015

(Reuters) - The Federal Reserve Wednesday stuck to its plan to keep stimulating the U.S. economy until the job market improves and repeated its vow to keep rates near zero until mid-2015.

In a policy statement after a two-day meeting, the central bank acknowledged hints of strength in the U.S. housing market, but reiterated a pledge to continue supporting growth even as the recovery picks up.

It said it would continue purchasing $40 billion in mortgage-backed debt per month to push interest rates lower.

The Fed did nod to a recent increase in inflation but said it was linked to higher energy prices, adding that inflation expectations have remained stable.

It also noted household spending has grown "a bit more quickly" but cautioned that business investment was softening.

"The committee remains concerned that, without sufficient policy accommodation, economic growth might not be strong enough to generate sustained improvement in labor market conditions," the Federal Open Market Committee's statement said.

Richmond Fed President Jeffrey Lacker again dissented from the decision, as he has done at every meeting this year.

The Fed, which has held rates close to zero since December 2008, had already bought $2.3 trillion in mortgage-related and government debt before it launched its latest round of stimulus.