Though the economy has started showing a sign of green shoots, yet Federal Reserve is not expected to make significant changes in its stimulus program that boosts spending and borrowing.
The Fed is expected to leave the federal funds rate, which is at present near zero, unchanged.
In addition, the Fed will most probably stick to its plan of purchasing mortgage backed securities plus debt issued by Fannie Mae & Freddie Mac worth $1.45 trillion by the end of 2009.
However, many economists fear that the low interest rate might give outburst inflation in the recent future. So the Fed wants to pull its support away as soon as possible.
Speaking on the topic, RDQ Economics' chief economist, John Ryding, said, "With so much slack in the economy, the Fed is not going to be inclined to raise rates anytime soon."
Ben Bernanke, chairman of Federal Reserve, said earlier that US had left the worst recession behind, but the economy remained fragile because of soaring unemployment and rigid credit conditions.
At present, unemployment is at 9.7 per cent, the highest in the past 26 years. Moreover, economists are the rate of unemployment could soar to 10 per cent in the next year.












