Fed stays the course on QE2, interest rates

The FOMC also decided to keep the short-term federal funds rate at 0 to 0.25 percent, where it has stood since late 2008, and reiterated Wednesday that it expects the rate to remain at “exceptionally low levels” for some time. 

As it did in a statement released last month, the committee also noted that both commodity prices and inflation have increased in recent months. But the policy-making group also expressed confidence that longer-term inflation expectations had essentially remained level, and said the economy was recovering at a “moderate pace.”

Sen. Mark Kirk (Ill.) is among the GOP lawmakers to cast doubt on the current round of quantitative easing, telling Bernanke in a recent letter that the effort may need to come to an early end because of inflation concerns.